Beverly Marijuana Adviser Bilked Investors Of $8M: State

BEVERLY, MA — Secretary of State William F. Galvin's Securities Division accused a Beverly-based financial adviser of bilking investors of more than $8 million, including one investor who lost more than $3 million. Frederick V. McDonald Jr., the CEO of US Advisory Group Inc., is accused of using the investments from more than 100 people for various ventures, but not the medical marijuana projects and dispensaries he had told clients they were investing in. Those ventures never received licenses from the state.

According to Galvin's office, the investor who lost more than $3 million had been McDonald's client since 2007 and had been given "only the barest of information" about investments he was being told he was making in the marijuana industry. In 2013, McDonald began steering the investor and other clients into putting money into the marijuana industry in Massachusetts. Those ventures included a proposed medical marijuana dispensary in Revere.

"McDonald failed to educate himself regarding the unique and complex licensing process in Massachusetts, which resulted in the distribution of offering documents that failed to adequately disclose to investors the risks or difficulties the investment could face," the complaint against McDonald said.

Galvin's office wants to McDonald to pay restitution and a fine. It also wants to permanently bar him from registering as a financial adviser in Massachusetts.

Dave Copeland can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).