CT Man Sentenced for Securities Fraud Scheme

A 58-year-old Connecticut businessman has been sentenced to two years in prison for orchestrating an investment fraud scheme that defrauded four investors out of $675,000.

Thomas F. Donnelly Jr. used Shoreline Index Partners LP, a company he created and managed, to solicit investors  - and eventually defraud them – between June 2006 and July 2008. In order to lure investors in, Donnelly made misrepresentations in an investment prospectus that falsely indicating that he had received a significant return before June 2006, the FBI announced in a press release.

Donnelly was able to get $675,000 from four investors. He claimed that all of the money would be invested, but instead only forwarded only approximately $175,000 to a Chicago-based brokerage clearing house. Donnelly used most of the other money for his own expenses, making mortgage payments on his Madison residence.

To hide his thefts and make it seem like the investments were prospering, Donnelly altered monthly brokerage statements by creating fake monthly statements from the clearing house. At one point, he claimed that his company’s investments had a total value of more than $3.8 million when in fact there was less than $50,000 there.

“We are committed not only to prosecuting corrupt investment advisors and seeking long prison terms but also to educating the investing public. Citizens are encouraged to be vigilant before entrusting funds to any individual or firm,” said David B. Fein, United States Attorney for the District of Connecticut. “Potential investors should be suspicious of guaranteed high rates of return, investments that promise ‘little or no risk of loss,’ and investment scenarios that are difficult to understand.”

 If you or a loved one has been victimized by securities fraud, call Sokolove Law today to learn more about pursuing an investment fraud lawsuit.

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