Beverly, Mass. Man Ordered To Pay More Than $500,000 In Restitution And Fines In Connection With Stealing From 11 Investors

November 30, 2007 -- SALEM – Today, a Beverly, Massachusetts man was ordered to pay over half a million dollars to investors who had hired him to invest their savings in stocks. Michael Abbot, age 52, was sentenced by Essex Superior Court Judge Howard J. Whitehead to seven years of probation.

Abbot will also be electronically monitored for the first eighteen months of his probation, and all of his financial dealings and bank accounts will be monitored for five years. Abbot was also ordered to complete two thousand hours of community service, the first one thousand of which must be done within the first three years.

Judge Whitehead also ordered that Abbot pay a fine of $20,000 for each charge of fraudulent sale or offer of securities (10 counts), and the charge of being an unregistered broker-dealer (10 counts), for a total of $400,000. Abbot was also sentenced to one year in the House of Corrections on the charge of failure to file tax returns (3 counts), suspended for seven years. Abbot has yet to be sentenced on charges of larceny by false pretense (8 counts), and larceny by false pretense for victims age 60 or over (2 counts). He is scheduled to be sentenced on January 28, 2008 on these remaining charges.

Abbot pretended to be a financial investment advisor who represented to his victims that he was investing their money in stocks. Abbot told these victim investors their money was going into well-performing stocks, such as Google, Ask Jeeves, Western Wireless, Lucent Technologies, Sirius Satellite, and Motorola, Inc. Abbot informed victims that they were doubling their money and often-times making hundreds of thousands of dollars on their investments with him.

Instead, the investigation found that Abbot used the victim’s funds for his own purposes including rent, expensive stationery, and taxi cab fares. Abbot also used the money to pay commissions to investors who urged friends and relatives to invest their savings with him.

In total, Abbot stole $526,500 from 10 victims, including small business owners, teachers, retirees and two victims in their 70s.

An Essex County Grand Jury returned the indictments against Abbot on May 20, 2005. Abbot pled guilty to the above charges on August 31, 2007. He was sentenced on 23 of the counts today by Essex Superior Court Judge Howard J. Whitehead.

The case was prosecuted by Assistant Attorneys General Marc Jones and Ina Howard-Hogan, and was investigated by financial investigators in the Massachusetts Attorney General’s Criminal Bureau.

Source: Massachusetts Attorney General

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