Investment adviser to serve 5 years for scamming clients

Judge orders sentence to begin Oct. 2

HADDAM » A local investment adviser will serve five years in jail for defrauding his clients of nearly $620,000, according to the U.S. Attorney for the District of Connecticut.

Aaron J. Johnson, 37, was sentenced Friday by U.S. District Judge Jeffrey Alker Meyer in New Haven to 60 months of imprisonment, followed by three years of supervised release, for defrauding clients of his investment business.

He was arrested Feb. 17, 2016. On Feb. 23 of this year, Johnson pleaded guilty to one count of mail fraud.

According to court documents, Johnson was president and chief investment officer of J. Capital Advisors and a registered investment advisor until Oct. 21, 2013, when his and J. Capital Advisors’ registration was revoked by the state. In April 2010, Johnson became a registered investment advisor with Trade PMR, a Florida company that provides brokerage and custody services for registered investment advisors, according to a press release. Almost immediately, he began skimming excessive and unearned fees from client accounts.

He would submit a request to Trade PMR for fees for a particular client supposedly earned during a particular time period and Trade PMR would arrange for those fees to be deducted from the client’ s account and deposited into a J. Capital Advisors’ sundry account over which Johnson maintained exclusive control, court documents show. By December 2012, when Trade PMR terminated its relationship with Johnson, he had taken a total of $619,231.09 in excessive fees from 19 victim clients.

He also tried to obstruct, delay and prevent the discovery of the full scope of his scheme by falsely claiming to one of his victims and to investigators with the state of Connecticut Department of Banking that fees taken from that victim’s account were due to a “glitch” inhis billing system, the release continued. Johnson submitted falsified documentation to Trade PMR including bogus account statements for clients, and letters of authorization that he forged purporting to allow him to take fees from client accounts.

The court found that he also submitted a falsified account statement to Department of Banking investigators in an attempt to show that he had funds with which to pay restitution.

Judge Meyer ordered Johnson to pay full restitution to his victims. Johnson, who is released on a $250,000 bond, was ordered to report to prison Oct. 2.