On Friday, August 25, 2017, United States Attorney Deirdre M. Daly announced that a former investment advisor with Trade PMR had been sentenced to 60 months in prison. The prison term will be followed by three years of supervised release. 37-year-old Aaron J. Johnson of Haddam was arrested on February 17, 2016 and subsequently pleaded guilty on February 23, 2017. Johnson is currently out on a $250,000 bond, but has been ordered to turn himself in on October 2, 2017.
Court documents and statements show that the defendant was President and Chief Investment Officer of J. Capital Advisors. He was also a registered investment advisor until October 21, 2013. At that time, the defendant and the company’s registration was revoked by the State of Connecticut. In April of 2010, Johnson began working as a registered investment advisor with the Florida company, Trade PMR.
The company provides brokerage and custody services for investment advisors. Shortly after becoming an employee with the company, Johnson started skimming excessive and unearned fees for customer accounts. The defendant would submit a request to the company for fees for a particular client. In response, Trade PRM would make arrangements for the fees to be deducted from the customer’s account and transferred to J. Capital Advisors’ account, which was controlled by the defendant.
Trade PMR terminated its relationship with the defendant in December of 2012. By that time, Johnson had acquired more than $619,000 from 19 victims. Johnson also took steps to try to obstruct and delay the discovery of the scheme. He falsely told one victim and State of Connecticut Department of Banking investigators that the fees were taken due to a “glitch” in the system. The defendant also submitted falsified documents to Trade PMR.
The judge has ordered Johnson to pay full restitution to all of his victims. Johnson, who has been sentenced to 60 months, is expected to begin serving his sentence on October 2, 2017.