Orleans-Based Investment Adviser Pleads Guilty to Multi-Million Dollar Fraud, Identity Theft

BOSTON – An Orleans-based investment adviser pleaded guilty in federal court in Boston yesterday to defrauding her clients of more than $3-million and using those funds for her own expenses.

United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division,  announced in federal court today that 51-year-old Kimberly Kitts plead guilty and was charged with one count of investment adviser fraud, four counts of wire fraud and one count of aggravated identity theft.

U.S. District Court Judge Denise J. Casper scheduled sentencing for March 20, 2019.

Beginning in 2011, Kitts engaged in various schemes to misappropriate her clients’ assets in order to pay her personal expenses.

In one scheme, she directed client assets to a bank account for Marquis Consulting, an entity she controlled.

In another scheme, Kitts used her position as an investment adviser to divert her clients’ funds to her own account and then took the funds for her own personal use. This included cashing her clients’ annuities, transferring funds out of her clients’ brokerage accounts and directing distributions from her clients’ Individual Retirement Accounts.

In total, Kitts misappropriated approximately $3,085,939 from her clients.

The charge of investment adviser fraud results in a sentence of no more than five years in prison, three years of supervised release and a fine of $10,000.

The charge of wire fraud calls for a sentence of no more than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.

The charge of aggravated identity theft provides for a mandatory consecutive term of two years in prison, which must be served consecutive to any other sentence imposed by the court. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

The U.S. Securities & Exchange Commission provided assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities and Financial Fraud Unit is prosecuting the case.

By TIM DUNN, CapeCod.com News Center 

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