Investment adviser guilty of defrauding elderly client
From Illinois Business Journal news services
EAST ST. LOUIS – Paul P. Gierten, 47, of Salem, pleaded guilty Tuesday in a case accusing him of cheating an elderly investment client out of $39,000.
United States Attorney for the Southern District of Illinois Stephen R. Wigginton announced the plea agreement.
Gierten was charged March 31 with defrauding the man, described as an octogenarian. Gierten formerly worked as an investment adviser in Centralia. The victim was one of Gierten’s clients. In August of 2009, Gierten falsely told the victim that he had an investment opportunity with a business that assisted military victims. Because he is a military veteran himself, the victim agreed to invest with this business.
From August 2009, through March 2011, the victim provided a total of $39,000 to Gierten for investment, but Gierten did not invest the victim’s funds as promised. Instead, Gierten used the victim’s funds for his own personal expenses and to pay operating expenses of his own business.
The specific crime with which Gierten was charged is interstate transportation of money or securities obtained by fraud. At Tuesday’s hearing, Gierten admitted that in March of 2011, he used $5,000 from the victim’s last investment to purchase a travel money card. Gierten then used the card to pay for his expenses during a trip to Colorado.
“Mr. Gierten took advantage of one of our most vulnerable citizens. We will always aggressively prosecute those who prey upon and defraud elderly residents of Southern Illinois,” Wigginton said.
Gierten’s sentencing hearing has been scheduled for July 31, at 11 a.m., at the Federal Courthouse in East St. Louis. The crime is punishable by up to 10 years in prison, and/or a $250,000 fine, and up to three years of supervised release. Gierten’s actual sentence will be determined by the court and will be guided by the advisory federal Sentencing Guidelines.
The investigation is being conducted by the Securities Department of the Illinois Secretary of State’s Office. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.