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Advisor, insurance agent face sentencing for schemes

Michael Schwartz March 14, 2017 0

Richmond Federal Courthouse

Richmond Federal Courthouse

A local investment advisor was sentenced last week to three years in federal prison for an embezzlement scheme, while a Chesterfield insurance agent will learn his fate before a judge Friday for bilking investors through a supposed nonprofit financial academy.

Richmonder Troy Baldridge received a 41-month sentence on March 10 for skimming $500,000 from client accounts.

The sentence also includes three years of supervised release, and he is barred from working in the financial industry.

Baldridge, 48, also owes $505,000 in restitution – to be paid in $350 monthly increments – or 25 percent of his net income, whichever is greater.

His charge of one count of mail fraud carried a maximum sentence of 20 years in prison, but federal prosecutors sought a range of 41 to 51 months. Baldridge and his attorney, Bill Dinkin of Stone, Cardwell & Dinkin, unsuccessfully argued for 18 months of incarceration followed by 15 months of home detention.

Baldridge pleaded guilty late last year to a scheme, between 2011 and last summer, that involved skimming from client accounts on at least 15 occasions. His efforts included forging client signatures, lying to and avoiding clients when asked about suspicious transactions, and taking advantage of clients who did not pay close attention to their accounts.

Arguing for a lighter sentence, Baldridge’s attorneys cited in court documents his lack of a criminal record and that his character and background “stand in stark contrast to the offense for which he entered a guilty plea.”

“He is a devoted husband and father and an active and well-respected member of his community,” court records state. “He is described as caring, generous, honest and compassionate and it is with great shock that his friends and family try to understand how he could have made the mistakes that bring him before this Court.”

His attorney also argued that a provision of the federal sentencing guidelines was not intended to cover the type of embezzlement committed by Baldridge.

FINRA records show Baldridge worked for locally based Capitol Securities Management from 2007 until last summer, when he was fired after allegations of check fraud.

He also previously worked for former Richmond financial firm Anderson & Strudwick.

The U.S. Attorneys Office argued that Baldridge, as a licensed investment advisor, had “heightened fiduciary duties imposed by these securities licenses and registrations. He knew better.”

It also claims he used the stolen money to fund a lavish lifestyle that included private school for his children and a tennis club membership.

“He was not running a Ponzi scheme, optimistically hoping to pay off old investors with new money. Nor was he stealing money to finance a drug habit. Defendant Baldridge simply wanted to keep up with the proverbial Joneses,” prosecutors argued in court filings.

An insurance policy from Baldridge’s firm compensated the 11 victims of his scheme, according to court records. That insurance company, Federal Insurance Co. in New Jersey, will get $455,000 of Baldridge’s restitution. The remaining $50,000 will go Capitol Securities and its head Mark Hamby.

Baldridge, who has remained free on bond, was ordered to self-report to U.S. Marshals in Richmond on April 10 to begin his sentence.

***

Baldridge pleaded guilty Dec. 13, one day before Chesterfield resident and insurance agent Larry J. Horsey admitted to a separate, unrelated scheme for which he’s set to be sentenced in federal court on Friday.

Larry J. Horsey pleaded guilty to defrauding nine investors out of a combined $1.9 million.

Horsey, a 41-year-old licensed insurance agent, ran Heroes Academy, a nonprofit he founded as a financial education school and financial management company. It touted a desire to make “debt-free millionaires” in classes that stressed the importance of saving money, court documents show.

Prosecutors say Horsey presented himself as a financial advisor and ran financial planning seminars in Virginia and North Carolina, convincing individuals to open what they believed would be investment or savings accounts, using annuities or Roth IRAs through Heroes Academy.

Horsey admitted to using those funds for his own use, including vacations to Florida and Hawaii, traveling to sporting events and supporting a local semipro football team, and to create fake documents made to look like they were from banks, the IRS and a fake website.

He pleaded guilty to mail fraud and engaging in transactions with funds derived from unlawful activities. He agreed to pay full restitution of at least $1.92 million of assets.

Prosecutors have asked for a sentence of seven years. Horsey, represented by local attorney John Luxton, has asked for 78 months in prison.

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