Financial adviser Douglas Hawkins sentenced to 10 years in prison for fraud

Financial Advisors


A financial adviser who tried to overturn a fraud conviction on the grounds of insufficient evidence was sentenced to 10 years in prison and ordered to pay millions of dollars in damages.

Counsel, attorney, and preacher Douglas T. Hawkins made notes tied to residential real estate worth more than $2 million worth of investment funds while making material misstatements and omissions as to the financial condition of the property and the mix of funds. sold to According to federal prosecutors Located in Lexington, Kentucky. After dismissing an acquittal earlier this month, District Judge Karen Caldwell sentenced Hawkins, 53, to a substantial prison term and $1.6 million in damages to more than 20 investors.

Caldwell said in his May 9 sentencing that “educated and privileged people will be held accountable for these crimes,” according to reports. in Lexington herald reader. “But I believe this crime has left destruction and damage beyond any sentence I can impose.”

Hawkins filed a notice on May 22 that he plans to appeal the February convictions of mail fraud, securities fraud and investment advisor fraud, according to court records. At his sentencing, he vowed to right his former client and told his family and friends he was sorry for embarrassing him in his lawsuit, according to local papers.

“There is no greater burden on my mind than the financial burden I have placed on my customers,” he said.

Hawkins’ attorney Whitney True-Lawson said in an interview that advisers should view the lawsuit “less as a Bernie Madoff case and more as a lesson in the need for diligence in investment research and client management.” rice field.

“The government’s theory is that the way it was done was dishonest, but there is a very valid argument that it was bad business,” Lawson said. “It will make them stop and think, ‘Hey, how do I run a clinic? How do I run a company?'”

The lawsuit also presents the latest example of disturbing allegations against counsel.

Hawkins’ sentencing came a month after two Ohio advisers were indicted with dozens of felony charges based on a case they accused of: Scam investors out of $72 million. In April, another former adviser from Florida signed a 15-year term. Elderly fraud targeting customers.North Carolina planner settled last month Securities and Exchange Commission case It alleges that it violated its fiduciary duty by selling alternative investments that were found to be fraudulent.

Hawkins’ defense essentially relied on the “no-perfection claim”, regulatory expert said Louis Strayney of arbitration insights.

“Advisors acting in a fiduciary capacity should not play a passive role and should not rely on investors to support themselves. “I can’t guarantee when my feet will touch the bottom of the pool.” The actual depth is 12 feet,” Stony said. “Fiduciaries have a duty to know material facts and disclose them to potential investors. is unthinkable.”

From mid-2013 to 2021, Hawkins will issue an investment prospectus to clients of the Lexington-based RIA, a promissory note secured by a trust deed tied to a rental home in Jackson, Mississippi, according to was sold to the customer without providing Investigator. Other omissions, according to investigative sources, include the fact that many of the homes were uninhabitable and frequently burgled or vandalized, and that the combined funds were used to pay other investors and to employees Harley. That includes the fact that it was used to buy Davidson.

Hawkins did not intend to defraud them, according to a March filing seeking to cover the verdict.

“Throughout the trial in this matter, and as confirmed at closing, the government has identified certain conduct that it deemed to be ‘evidence’ of Mr. Hawkins’ fraudulent intent,” the filing reads. “In reviewing each of these alleged acts, the evidence is not only scant, but is often inconsistent with the evidence of Mr Hawkins’s bona fide intentions to reassure investors.”

The government’s response categorically denied the allegations.

“A number of factual episodes were presented during the trial from which the jury could reasonably infer the defendant’s fraudulent intent,” prosecutors said. “Seven separate customer witnesses gave irrefutable testimony that defendant omitted or misled the value, condition, and rental status of Mississippi real estate.”

Caldwell said, “If you are a reasonable fact-checker, [the] Hawkins acted beyond reasonable doubt with intent to defraud,” she wrote in the order. Her inmate records show she was held at the Woodford County Jail pending her transfer to federal prison.



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