SEC officials charged former LPL Financial broker Thomas Edward Andrews of California with defrauding 23 investors by convincing them through lofty promises of high returns to liquidate their securities in order to invest in "The Jackson Trust" and "The Lincoln," which regulators claim were fake companies that served as a cover for Andrews and his assistant Scott Walter Christensen of Utah to misappropriate the invested funds.
In all, Andrews allegedly misappropriated nearly $8.4 million from the investors and paid Christensen approximately $1 million when the 23 investors liquidated their savings and retirement accounts in order to invest in Andrews' fraudulent entities.
According to the SEC's complaint, Andrews persuaded the 23 unsophisticated investors to liquidate and invest their savings and retirement funds in two investments he recommended called "The Jackson Trust" and "The Lincoln," which the SEC wrote were sham companies and fictitious investments opportunities that served as a front for Andrews and Christensen to steal the investors' money.
The report indicates that Andrews served as a representative of Gary A. York & Associates of Salt Lake City, Utah, which is supervised by LPL Financial, and that Andrews persuaded customers to invest in the Jackson Trust by advertising "guaranteed" annual returns of 6% to 8.5%, further claiming that he had "special access" to the Jackson Trust because of connections that Andrews purportedly shared with industry power players.
The SEC wrote that Andrews set up two bank accounts—one titled "Jackson Trust" and the other "Lincoln Trust"—with himself as trustee and sole signatory at an area credit union, and subsequently deposited investor checks into this account before transferring those funds to himself.
Christensen purportedly helped Andrews create fake Jackson Trust statements by cutting and pasting information over existing real-world account statements while doctoring the fake copy so that it would appear to be genuine. The duo allegedly went so far as to drive to California to mail the Jackson Trust account statements from a California post office, since the Jackson Trust was supposed to be located in California.
Christensen also allegedly posed as "David Williams," a fake Jackson Trust supervisor, during telephone conversation with duped clients, and made up reasons and excuses as to why the investors were not receiving their previously-"guaranteed" funds from the Jackson Trust.
"David Williams" allegedly assured customers that Andrews would be disciplined for his failure to ensure payment, but behind the scenes, the actor behind "David Williams"—Christensen—simply assisted Andrews in the fraudulent misappropriation scheme, allowing the pair to pay home mortgage, car payments, and purchase electronics, jewelry, and other personal use items.
The fraudulent scheme ultimately ended when more investors began calling Andrews, who stopped returning their calls and cut off all contact, having already diverted and defrauded the investors out of $8.4 million.
Thomas Edward Andrews—who currently sits in federal prison on securities and mail fraud charges—received a permanent bar from FINRA in 2016 in relation to the fraud investigation, while several customer complaints totaling over $18.5 million in alleged damages remain pending. The disputes were filed on behalf of at least 44 claimants and allege that Andrews simply stole their money while associated with LPL Financial.
If you have invested with former LPL Financial broker Thomas Edward Andrews, his assistant Scott Walter Christensen, or with any other financial adviser or broker whose false statements, misrepresentations, and solicitation to invest in a fraudulent enterprise has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.