Financial Adviser Gets 25-Year Sentence For $10 Million Ponzi Scheme
A chorus of clapping and cheering erupted after a Minnesota former financial adviser was sentenced to serve the next twenty-five years in federal prison for using his registered investment advisory business to defraud dozens of his clients out of more than $10 million in an elaborate Ponzi scheme. Sean Meadows, 42, received the sentence from U.S. District Judge Susan Richard Nelson after previously pleading guilty to seven counts of wire fraud, three counts of mail fraud, and one count of money laundering. Prosecutors had been seeking a 30-year sentence, while Meadows' lawyer sought a 10-year term.
Meadows operated Meadows Financial Group ("MFG"), which provided financial management and asset planning services to clients and also sold various insurance and investment products. Beginning sometime in 2007, Meadows began soliciting clients to invest in an MFG investment vehicle - typically a bond - that would provide an annual return of up to 10%. Investors were told that their funds would be used to purchase bonds, real estate, or other legitimate investments, and Meadows represented that the investment would be both safe and liquid. In total, Meadows raised more than $13 million from over 50 MFG clients.
However, the investment touted by Meadows was neither safe nor liquid, and the promised returns were possible only by using funds invested by new investors - a classic hallmark of a Ponzi scheme. In addition to using investor funds to pay returns to existing investors, Meadows lived a life of luxury that included the payment of personal expenses including credit card bills, the purchase of vehicles, gambling trips to Las Vegas, and over $100,000 in payments to various adult entertainment businesses in Minnesota and Las Vegas. Authorities peg total losses to victims at approximately $10 million. A court-appointed receiver has returned approximately $3 million to victims.
A copy of the indictment is below: