Newton Investment Adviser Charged With Fraud

A Newton-based investment adviser was arrested and charged on Wednesday with pitching fictitious investments to defraud investors out of hundreds of thousands of dollars, according to an announcement from Middlesex District Attorney Marian Ryan.

Paul J. Jackson, 58, of Wellesley, was charged with one count of wire fraud.

Jackson owns and operates Paul J. Jackson & Associates, LLC in Newton, according to documents, through which he manages retirement funds for clients.

The Middlesex DA said that beginning in 2010, Jackson started offering clients and others what appeared to be attractive investment opportunities. The investments Jackson offered typically involved initial public offerings (IPOs) of high-profile companies, but Jackson did not invest the clients’ money as promised. Instead, said the release, he took hundreds of thousands of dollars of investor money for his own use.

Jackson, for example, allegedly took $175,000 from one investor to whom he pitched a lucrative investment in Alibaba’s IPO. He didn’t invest the money, said investigators. Jackson, instead, kept $112,000 and gave $60,000 to another investor who had given Jackson more than $450,000 and was demanding his money.

When other investors requested their money back, Jackson offered excuses and never told them that he had simply taken their money, said the U.S. attorney.

The Massachusetts Securities Division also filed a separate administrative action against Jackson, charging him with fraud and seeking to bar him from working in the securities industry.

The maximum sentence under the wire-fraud statute is 20 years in prison, three years of supervised release, and a fine of the greater of $250,00 or twice the gross gain or loss.