Former Haddam Investment Advisor Admits to Stealing More than $600K from Clients

HADDAM, CT - A former investment advisor pleaded guilty Thursday to mail fraud stemming from a scheme to defraud clients of his investment business.

According to court documents and statements made in court, Aaron J. Johnson, 36, of Haddam was President and Chief Investment Officer of J. Capital Advisors. He was a registered investment advisor until October 21, 2013, when his and J. Capital Advisors’ registration was revoked by the State of Connecticut, according to a release.

Johnson became a registered investment advisor in April 2010 with Trade PMR, a Florida company that provides brokerage and custody services for registered investment advisors. Almost immediately, Johnson began skimming excessive and unearned fees from client accounts.

Johnson would submit a request to Trade PMR for fees for a particular client supposedly earned during a particular time period, and Trade PMR would arrange for those fees to be deducted from the client’s account and deposited into a J. Capital Advisors’ sundry account over which Johnson maintained exclusive control.

By December 2012, when Trade PMR terminated its relationship with Johnson, he had taken a total of $619,231.09 in excessive fees from 19 victim clients.

Johnson also 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 investigators that the fees were taken out due to a “glitch” in his billing system.

The suspect has been scheduled for sentencing on May 23, at which time he faces a maximum term of 20 years in prison.

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