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Advisor forged client’s signature, stole $900k, says FBI

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An advisor forged his client’s signature on checks he lifted from her home as part of a five-year fraud scheme netting nearly $1 million, according to the FBI.

“You know, it starts out small,” ex-Forum Financial Management partner William P. Carlson Jr. allegedly told the company’s compliance officer after he was caught. “You think you are going to pay it back.”

Carlson admitted to the thefts under questioning by his company and FBI white-collar crime agents, according to a federal complaint filed this week in the Northern District of Illinois. Forum has paid the client back for her losses, the firm said in a statement.

The SEC charged Carlson, 53, in a parallel civil action with cheating his client out of at least $911,000 through 41 secret withdrawals from her account. His Chicago-area RIA firm fired Carlson and alerted the agency after finding out about the theft, according to the firm.

“Naturally, we were dismayed to learn that one of our advisors was taking money from a client without that client’s knowledge or permission,” the company said in a statement sent by Chief Compliance Officer Brian Savage, who is also a partner in the firm.

“We apologized and immediately reimbursed all funds to the affected client, including advisory fees as well as any interest and gains this individual would have made on their investments," the statement continues. "We are also conducting a review of our client accounts and, at this time, the incident appears to be isolated to one affected client.”

The firm says it is cooperating with the investigation.

Efforts to reach Carlson or any attorney representing him were not successful. He made his initial appearance in Chicago district court earlier this week, walking free on bond, according to a spokesman for the U.S. Attorney’s Office.

Reached by phone, Mary Anne Ehlert, a Forum partner whose firm Elhert Financial Group had employed Carlson, referred questions to Savage and declined to comment further.

Both firms parted ways with Carlson on Feb. 6, according to SEC records. Carlson joined Forum, which is based in the Chicago suburb of Lombard, Illinois, in 2010. He served more than 70 clients at the time of his termination from the two firms, according to the SEC.

Carlson began stealing from his 63-year-old client in November 2012 and continued doing so until December 2016, according to the SEC. Upon noticing that her account with the firm’s custodian had only $48 left in it, the client triggered the investigation, prosecutors said.

Investigators said Carlson arranged for the checks to be sent at times she knew his client would be away. He used tracking information from the custodian to pick up the checks from her home before she could see them, FBI agents said.

In all, Carlson forged the victim’s signature on 16 different checks ranging from $6,500 to $97,000 for a total of $437,000 over three years, according to regulators. Carlson then used the fake endorsements to deposit the checks into his own account, investigators said.

Once, in the early years of his scheme, Carlson's client might have figured out what he was doing, he told the FBI agents. She received a $97,000 check from her custodian before Carlson could lift it from her home, according to the complaint. But she apparently accepted Carlson's explanation that the custodian had made an error. He then took the check and forged her signature to endorse it to himself, prosecutors said.

At one point, Carlson's own bank eventually stopped accepting third-party checks, according to the complaint. He then enlisted a friend who didn’t know what he was doing to make 25 more transactions from the client’s account for $474,000, according to investigators.

Carlson forged the victim’s signature on a letter of authorization allowing checks from her account to be issued to his friend, prosecutors said. His friend then deposited the checks and forwarded the proceeds to Carlson, keeping $300 or $400 each time, according to the FBI.
Carlson said his friend “had no idea” about the scheme but never asked any questions about the checks, according to the complaint. The spokesman for the U.S. Attorney’s office declined to comment on whether the friend faces charges or an investigation into his conduct.

The fraud began to unravel in January, when the client asked Carlson to send her $35,000 from her account, according to investigators. After she received only $3,500, Carlson told her that the advisory firm was having issues with the custodian and that to expedite payment he would personally write a check to her, then seek reimbursement, according to the SEC.

On Jan. 31, Carlson wrote her a $31,500 personal check, according to the complaint.

Although at one point Carlson had emailed a fake account statement listing her assets at more than $884,000, the client discovered the true amount had fallen below $50 after contacting her custodian directly. After being contacted by the victim, the custodian’s fraud department initiated an investigation.

Carlson confessed to the scheme in a phone conversation with Forum’s compliance officer on Feb. 6, according to the FBI. The company then transferred $1.1 million into the victim’s account to compensate her for the stolen funds and other expenses, prosecutors said. Carlson himself gave the compliance officer a check for $200,000 and said he was willing to sign a promissory note for the rest of the funds.

Carlson told FBI agents that he preyed on his client “in order to support his lifestyle, because he was short of money,” according to the complaint.

Carlson, who faces charges of mail fraud, has yet to enter a formal plea in the case. The U.S. Attorney’s office spokesman said no date has been set for his next appearance.

With additional reporting from Ann Marsh.

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