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Investment advisor sentenced to prison for defrauding retirees

August 16, 2011 | 12:33 pm

Cash
 
A financial advisor from Topanga has been sentenced to nine years in federal prison for running an "audacious" Ponzi scheme that defrauded investors, many of them retired bus drivers, out of more than $7 million.

Thomas L. Mitchell, 64, was sentenced Monday at the federal courthouse in Los Angeles. U.S. District Judge Gary A. Feess also ordered him to pay more than $7 million in restitution to about 60 victims.

Mitchell, who pleaded guilty in April to mail fraud, established several companies to target retirees, many of them former transit operators for the Los Angeles County Metropolitan Transportation Authority, prosecutors said. He operated the scheme from 1995 to 2010 and cost many victims most or all of their retirement savings, said Thom Mrozek, a spokesman for the U.S. attorney’s office in L.A.

Mitchell told investors that he would put their money in stocks, bonds and real estate but in fact used most of the funds he raised to finance a lavish lifestyle including a luxury apartment, high-end cars and expensive travel and entertainment, prosecutors said.

“Mr. Mitchell committed an audacious fraud that spanned many years and devastated many victims,” said U.S. Atty. André Birotte Jr. “He was able to lead a luxurious lifestyle by stealing the life savings of hard-working men and women who only sought a dignified retirement. For his criminal conduct, Mitchell richly deserves his nearly decade-long prison sentence.”

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Photo: Thomas L. Mitchell was ordered to pay more than $7 million in restitution. Credit: Bloomberg

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