Broker sentenced in $3 million Ponzi scam 

A former Greenville broker accused of stealing from his clients in a long-running Ponzi scam was sentenced Tuesday to two years in a federal penitentiary.

Claus C. Foerster, 56, of Spartanburg, defrauded clients of over $3 million while employed as a financial adviser at Morgan Keegan & Co. and Raymond James Financial Inc. in Greenville, according to a five-count indictment charging Foerster with wire fraud.

U.S. District Judge Bruce H. Hendricks sentenced Foerster to 24 months in prison to be followed by three years of supervised release, according to the U.S. Attorney’s Office for the District of South Carolina.

Forester also was ordered to pay more than $3.5 million in restitution to the victims, the U.S. Attorney’s Office said.

Forester was employed as a financial adviser by Citigroup Global Markets Inc. in Spartanburg from 1997 to 2008 and Morgan Keegan & Co. in Greenville from 2008 to 2013, according to the Financial Industry Regulatory Authority, which permanently banned Foerster from the industry in June 2014.

Foerster was terminated from Raymond James & Associates on June 3, 2014, FIRA said.

Between 2000 and 2014, the federal indictment alleges Foerster advised clients to put their money into SG Investment Management, a company that was “totally fictitious” and “created solely by the Defendant solely to further his scheme to defraud.”

Foerster had clients move cash from their brokerage accounts to their bank accounts and then write checks payable to SG Investments, the indictment alleges.

“By creating bogus account statements and on occasion returning some funds to the clients as ‘profits,’ he was able to keep the scheme going for over a decade,” said Acting U.S. Attorney Beth Drake.

The case was investigated by the U.S. Secret Service and prosecuted by Assistant U.S. Attorney David Stephens of the Greenville Office.

Source: Greenville Online

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