Former Plymouth Financial Adviser Guilty of Scheming to Embezzle Over Four Million Dollars

May 5, 2010 - BOSTON, MA—A former Plymouth financial adviser pled guilty in federal court to fraud and tax charges in connection with his theft of $4.3 million from his clients.

United States Attorney Carmen M. Ortiz; Robert Bethel, Postal Inspector in Charge of the U.S. Postal Inspection Service, Boston Division; Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation - Boston Field Division; and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division announced today that STEPHEN CLIFFORD, 58, pled guilty before U.S. District Judge Nancy Gertner to one count of willful violation of the Investment Advisers Act, one count of mail fraud, one count of wire fraud and three counts of subscribing to a false tax return.

At today’s plea hearing, the prosecutor said that had the case proceeded to trial the Government’s evidence would have proven that between March 2003 and June 2008, CLIFFORD induced clients to give him and his company, Clifford Financial Associates, money to invest on their behalf, assuring them that he would select appropriate securities for their financial needs and tolerance for risk. Instead of investing the money, CLIFFORD used the funds to pay personal expenses—including his mortgage, alimony, credit card bills, payments on his home equity line of credit, and his daughter's college tuition—and to fund a personal trading account which he used to speculate in oil futures. Additionally, CLIFFORD failed to report $2.1 million in investor funds, which he had converted to his own use, on his tax returns for tax years 2004 through 2006. CLIFFORD's scheme resulted in a loss to about 20 investors of $4.3 million.

On the count for willful violation of the Investment Advisers Act, CLIFFORD faces up to five years' imprisonment to be followed by three years of supervised release. He faces 20 years' imprisonment to be followed by three years of supervised release on the mail and wire fraud counts. These counts can include a fine of up to $8.6 million. The tax charges are each punishable by up to three years' imprisonment to be followed by one year of supervised release, and a fine of up to $250,000. Sentencing is scheduled for September 14, 2010, at 2:30 p.m.

The case was investigated by the Postal Inspection Service, the Internal Revenue Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz's Economic Crimes Unit.