Former Lincoln Investment Planning, LLC Broker Lester Burroughs Accused of Investment Fraud
Posted on Thursday, January 9th, 2020 at 11:45 am
Erez Law is currently investigating former Lincoln Investment Planning, LLC broker Lester Burroughs (CRD# 1413972) regarding securities fraud.
Burroughs was registered with Lincoln Investment Planning, LLC in Torrington, Connecticut from 2012 to 2019, when he was terminated regarding, “On Dec 5, 2019 Lincoln became aware of charges filed on December 4, 2019 by the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office wherein the representative plead guilty to one count of wire fraud in the sale of fictitious insurance contracts to four individuals.”
According to court documents, Burroughs owned Burroughs Investment Group, a full-service financial consulting firm based in Torrington, Connecticut.
In April 2020, Burroughs was sentenced to 33 months in prison, followed by three years of supervised release, for misappropriating approximately $575,000 from investment clients, most of whom were elderly. According to the press release, between 2012 through 2019, “Burroughs misrepresented to certain clients that their money would be invested in legitimate guaranteed investment contracts. Instead, he used his clients’ money to pay business expenses and other clients’ ‘guaranteed’ investment returns… Burroughs began the scheme after an investment he recommended to a client failed to materialize an expected return and Burroughs feared the possible financial repercussions to his business should that client file a complaint with regulatory agencies. Burroughs then stole approximately $370,000 from an elderly client in order to pay the nonexistent returns of the failed investment to the first client. In 2018, after the elderly client’s daughter demanded a full accounting of her mother’s investments, Burroughs tried to cover up his conduct by providing his client’s daughter with fraudulent accounting statements and documents. When his client’s daughter demanded money, Burroughs provided the client with funds he had stolen from three other unsuspecting clients, all of whom were told by Burroughs that he was investing their money in guaranteed investment contracts.”
Burroughs was released on a $100,000 bond and is scheduled to report to prison on June 1, 2020. Burroughs is required to pay full restitution.
In January 2020, the Securities and Exchange Commission (SEC) barred Burroughs for participating in any offering of a penny stock. Burroughs pled guilty to one count of wire fraud. According to Burrough’s BrokerCheck profile, “Burroughs pled guilty alleged, inter alia, that Burroughs executed a scheme to defraud his investment clients that resulted in him misappropriating approximately $575,000 from three investors. Burroughs made false or misleading statements to investors, telling them their assets would be used to purchase legitimate investments on their behalf, when in fact Burroughs used his clients’ money for his own purposes and to pay returns to other clients.”
In December 2019, the Securities and Exchange Commission (SEC) alleged that Burroughs engaged in a scheme to defraud retail investors from at least November 2012 to at least January 2019. According to the SEC, “Burroughs misappropriated advisory client money for his own personal use, created and sold fictitious investment products to clients, and engaged in a Ponzi-like scheme by paying back some advisory clients with money stolen from other advisory clients. Burroughs defrauded at least five clients and has failed to return at least $560,000 to three of his clients.”
In December 2019, Burroughs pled guilty to fraud by wire, radio, or television.
Burroughs has been the subject of 14 customer complaints between 1994 and 2020, three of which were closed without action and three were denied, according to his CRD report.
January 2020. “The firm’s client and his non-client spouse were each sold a universal life insurance policy with a face amount of $150,000 by the financial advisor in 2010. The policies were sold prior to the advisor joining the firm. The individuals allege that when premiums were due each year, the advisor told them they did not need to pay the premiums, but that the insurance would remain in force. Both policies have lapsed due to non-payment of premiums.” The case is currently pending.
December 2019. “Client filed Citizen’s Complaint with US Attorney’s Office on 12/20/2019 and forwarded a copy to the firm on 12/21/2019. Complaint was filed after client received a letter from firm informing client of US Attorney’s Office criminal (3:19-cr-00292) and SEC civil (3:19-cv-01913) charges filed 12/4/2019 against her rep. Client is requesting to be added as a victim and is requesting assistance in recovery of her lost principal. Firm will work with client, government and SEC to assist with her request.” The case is currently pending.
December 2019. “Client alleges elder abuse, misappropriation and unsuitable investments recommended by advisor, all of which caused client to lose the needed liquidity of her investments and suffer substantial losses.” The case is currently pending.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Lincoln Investment Planning, LLC may be liable for investment or other losses suffered by Burroughs’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.