Financial adviser who looted clients' accounts gets three years in prison

September 9, 2005
Newsday

TRENTON, N.J. -- A New Jersey-based American Express financial adviser was sentenced Friday to three years in prison after pleading guilty to stealing more than $400,000 from his clients. Cherry Hill resident Arthur Davidson must also pay restitution to 22 clients and permanently forfeit his broker's license. He pleaded guilty June 26 to one count charge of theft by deception.

Authorities said that from June 2001 through October 2004, while working at the firm's southern New Jersey office in Voorhees, Davidson forged client signatures on mutual fund redemption forms and other documents, liquidating their assets and collecting commissions and fees. Davidson also billed some clients at excessive rates, McKoy said. One retiree with $10,000 in assets was charged $3,500 in a single year, while a woman in her 60s was charged $7,000 one year for management of assets of $25,000.

American Express Financial Advisors initially discovered Davidson's actions through an internal investigation, and reported its findings to the state Board of Securities. After the board's investigation uncovered widespread failures in supervising franchise advisers, American Express Financial Advisors agreed in June to pay the state a civil penalty of $5 million and to better supervise its advisers.