Five Year Sentence For Former Morgan Stanley Broker James Polese

In September, we told you about Morgan Stanley brokers James Polese and 29-year-old Cornelius Peterson, who were found guilty of financial charges ranging from conspiracy to aggravated identity theft. They have both been sentenced in the case.

James Polese has been sentenced to 60 months (five years) in prison after pleading guilty to one count of conspiracy, one count of investment adviser fraud and eight counts of bank fraud as well as a charge of aggravated identity theft. The government originally requested 75 months, and the federal guidelines indicate a minimum sentence of 87 months. Polese’s attorney argued for a shorter sentence of 40 months.

Polese was ordered to pay $462,000 in restitution plus a $30,000 fine. After his release from prison, he will be supervised for three years. He will be restricted from working in financial services, and prohibited from drinking alcohol beyond a blood alcohol content (BAC) of 0.10. The judge recognized Polese’s work towards rehabilitation, which included speaking with two ministers who offered letters of support.

Cornelius Peterson was sentenced to 20 months in prison as a co-conspirator to Polese. The SEC has also filed cases against both brokers, accusing them of violating the Securities Exchange Act and the Advisers Act. This agency sought to compel both to disgorge their “ill-gotten gains.” Although that case has been solved with Peterson, Polose’s is still pending.

Peterson and Polese used over $850,000 of client money from 87-year old philanthropist and victim Ralph Bates to not only pay Peterson’s credit card bills and college tuition for his children (about $93,000.) The pair also used $350,000 for a real estate investment, and $400,000 to back a letter of credit in support of an investment for a wind farm project. All of the money they used was without Bates’ consent, who considered Polese a “good friend.”

Polese apologized to his victims, his children, and his ex-wife. His attorney stated in court that as a result of his crimes that he had “lost everything.”  Stockbrokers are generally prohibited from engaging in outside business activities with customers.

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct.  Most cases handled on a contingent fee basis. This means that you won’t any pay legal fees unless we are successful. Call us toll free at 800-975-4345, or use our online contact form to get in touch. Additionally, Silver Law Group routinely represents elderly investors in investment fraud cases and also maintains a website at www.elderfinancialfraudattorneys.com with additional information.