A former Haddam investment advisor was arrested by federal authorities Wednesday on three counts of mail fraud, one count of wire fraud and two counts of interstate transportation of stolen money. If convicted, he faces more than 10 years of prison.
According to the U.S. Attorney’s office, Aaron J. Johnson, 35, formerly of Haddam, from May 2010 to May 2013, allegedly engaged in a scheme to defraud his clients by causing excessive and unearned fees to be deducted from his clients’ accounts at Trade PMR and deposited into his Trade PMR sundry account.
Johnson was president and chief investment officer of J. Capital Advisors, a Connecticut company and a registered investment advisor with Trade PMR, a Florida company that provides brokerage and custody services for registered investment advisors.
The indictment alleges he took more than $150,000 from clients and then attempted to delay and prevent the discovery of the full scope of his scheme by repaying fees he took from one victim, claiming to the victim and to investigators with the state Department of Banking that the fees were taken out due to a “glitch in the system.”
During the Department of Banking’s investigation, Johnson was asked to provide proof that he had funds with which to repay his victims. He then emailed a falsified account statement to investigators in which he purported to have more than $117,000 to prove he had funds to repay his victims, investigators claim. The indictment said he had a negative balance in the account.
Johnson is alleged to have spent much of the money taken from clients for his own personal use, including on the purchase of a convertible Jaguar and a $10,000 transfer into his personal account at SunTrust Bank.
