A Virginia financial adviser’s $6 million fraud was discovered after a client attempting to obtain a bridge loan to cover relocation expenses to an assisted living community discovered that the adviser took out an $800,000 loan in her name without her consent.
After pleading guilty, Michael Barry Carter, 47, is facing a maximum of 20 years in prison to wire fraud and five years for investment adviser fraud. He is scheduled to be sentenced Nov. 9.
From at least October 2007 to July 2019, when he was a financial adviser at an unnamed financial institution based in Tysons Corner, VA, Carter made at least 53 unauthorized wire transfers totaling at least $5 million from his clients’ accounts to his personal accounts, according to the Justice Department. He also admitted embezzling more than $50,000 from a nonprofit sports organization in Loudoun County, VA.
His fraud was discovered when one of his clients and her adult daughter attempted to obtain a bridge loan to cover relocation expenses to an assisted living facility in Florida until the sale of her Maryland home was complete. Upon applying for the loan, they found that an $800,000 loan already had been obtained in the woman’s name, without her knowledge or permission.
Carter admitted that he met with the woman in her home and answered her phone, without her knowledge, to authorize the transactions in an attempt to overcome the multi-factor verification system required to execute the transactions.
Carter was fired from the financial institution on July 29, 2019. During an Aug. 2 call with his former employer, he admitted that he defrauded five victims over several years, forged their signatures on bank authorization forms, created false financial statements and mailed those financial statements.
In total, Carter stole at least $6.1 million, according to the Justice Department. He reportedly used the money to pay his mortgage, credit card bills and country club membership fees.
Before he was caught, Cater returned $1.8 million to his victims and repaid the nonprofit for its loss, the Justice Department said. Of the total amount repaid, $1.1 million came through transfers Carter made from other victim accounts. As part of his plea agreement, he will be required to repay the $4.4 million in net proceeds.
The Securities and Exchange Commission has filed a related civil proceeding in the case.