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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23781 / March 17, 2017

Securities and Exchange Commission v. Patrick Churchville, et al. No. 15-cv-00191-S-LDA (May 7, 2015) (D.R.I.)

United States v. Patrick Churchville, No. 1:16-cr-00068-S-LDA (July 5, 2016) (D. R.I.)

Rhode Island Investment Adviser Receives 7-year Sentence for Orchestrating a $21 Million Ponzi Scheme

On March 16, 2017, Chief Judge William E. Smith of the United States District Court for the District of Rhode Island sentenced Patrick Churchville, a defendant in an ongoing SEC litigation, to 7 years in federal prison following his guilty plea to five counts of wire fraud and one count of tax evasion in connection with orchestrating a $21 million Ponzi scheme and misappropriating additional money from funds he advised. The court also ordered Churchville to perform 2,000 hours of community service, and to pay restitution to harmed investors in an amount that will be determined at a future hearing.

The SEC previously charged Churchville, the owner and president of ClearPath Wealth Management, LLC, an investment adviser formerly located in Providence, Rhode Island, and ClearPath in a civil action filed on May 7, 2015. According to the SEC's complaint, from at least December 2010, ClearPath and Churchville diverted deposits from investors to pay other investors, used proceeds from selling particular investments to pay unrelated investors, used investors' funds as collateral for loans to make investments for their own benefit then used other investors' money to repay the loans, and converted investor funds into investments for ClearPath's own benefit. Churchville borrowed money by using investors' funds as collateral, without investors' knowledge, and stole $2.5 million of the borrowed money in order to purchase his waterfront home in Barrington, Rhode Island. The SEC's litigation against Churchville and ClearPath continues.

The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Rhode Island, the Federal Bureau of Investigation for the District of Rhode Island, the Internal Revenue Service — Criminal Investigation Division and the United States Postal Inspection Service.

 

https://www.sec.gov/litigation/litreleases/2017/lr23781.htm


Modified: 03/17/2017