The former president of a Rhode Island investment company pleaded guilty to orchestrating a Ponzi scheme to defraud investors of $21 million and also for stealing $2.5 million of investors’ funds, which he used for the purchase a waterfront home, according to an announcement by United States Attorney Peter F. Neronha.
Patrick E. Churchville, 47, of Barrington, RI, who was the owner and president of ClearPath Wealth Management, LLC, formerly located in Providence and Barrington, appeared at a federal court in Providence where he pleaded guilty to five counts of wire fraud and one count of tax fraud before U.S. District Court Chief Judge William E. Smith.
According to court documents and information presented to the court, federal investigators found that for three years, starting from the spring of 2008 to October 2011, Churchville took about $18 million of client investors’ funds held by ClearPath, and invested the money in a company identified as JER Receivables, based in Maryland. In June 2010, Churchville discovered that the investment with JER was not yielding any returns and that ClearPath were in fact victims of fraudulent and misleading representations made by the executives at JER. But Churchville did not disclose to ClearPath’s investors that millions have been lost from their investment, instead he tried to cover it up.
Court documents state that Churchville took deliberate steps to conceal the lost of investors money through his dealings with JER, and he did this in order to continue his business operations and enjoy additional income that accrued from investment fees. [Read more…]