April 14, 2021
A U.S. District Judge recently sentenced former Morgan Stanley advisor, Michael Carter, to five years in federal prison and three years of supervised release for misappropriating $6 million from brokerage customers from October 2007 through May 2019. Carter was associated with Morgan Stanley in McLean, Virginia from December 2011 to August 2019, when he was discharged after allegations of misappropriation arose.
The SEC alleged in its Complaint that Carter misappropriated over $6 million from his brokerage customers, including family and friends, and an elderly investment advisory client. Carter effected 60 unauthorized cash wire transfers by creating fictitious entities in the authorization forms as the beneficiary account holder from his customers’ bank account to his personal bank account. Carter provided fabricated account statements to these customers and had brokerage account documents forwarded to a P.O. Box that he controlled or to email accounts that he created and controlled.
The fraudulent activity was discovered when an elderly client and her daughter tried to obtain a bridge loan from Morgan Stanley to pay for relocation expenses to an assisted living facility in Florida. They discovered an $800,000 loan had fraudulently been obtain in the mother’s name and the disbursement of the loan proceeds went to Carter’s personal bank account.
Carter pleaded guilty to misappropriating and using customer funds. Along with jail and time and supervised release the U.S. District Judge ordered him to pay at least $4.35 million to cover the net proceeds he obtained from the scheme.
If you lost money due to Michael Carter’s scheme, you may be able to recover from Morgan Stanley, the brokerage firm where he was registered. Since 1998, the attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.