Barrington Financier Sentenced to 7 Years for Ponzi Scheme

BARRINGTON, RI — Patrick Churchville, 47, was sentenced in federal court today to 84 months for wire fraud and tax evasion. He owned ClearPath Wealth Management, LLC, formerly located in Providence and Barrington, and was accused of running a $21 million Ponzi scheme.

According to documents filed in U.S. District Court, he invested clients' money in JER Receivables, of Maryland. Between 2008 and 2011, he and ClearPath had committed about $18 million to investments with JER.

But by June 2010, Churchville had realized JER principals had misled him. He had, in reality, lost millions. But instead of leveling with the investors, he tried to hide the losses, keep the business going and continue collecting his fees.

"Churchville misappropriated approximately $21 million dollars of investment money. To obtain the $21 million dollars, Churchville misused investor money already under his control and obtained new investor funds. He used this money to pay back the JER investors and told them, falsely, that the money was the return on their investments. To induce new investments to carry out the schemes, Churchville lied and told investors that ClearPath’s previous investments with JER Receivables had been successful and produced high rates of return."

Besides running the Ponzi scheme, he was accused of stealing $2.5 million from investors, using the money to buy a home, and failing to pay more than $820,000 in personal federal income taxes.

He was charged with one count of tax fraud and six counts of wire fraud.

Last summer, he agreed to a plea deal.

At today's sentencing, he was given six 7-year sentences (one for each of the six counts). All the sentences are to run concurrently for a total of 84 months in prison. He also was given three years probation with Special Conditions, again for each of the six counts to run concurrently. He's required to pay $600 in a special assessment, and he must pay restitution. That figure is yet to be decided.

Churchville has agreed to surrender on April 10 to the U.S. Marshal.

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