A former Spartanburg financial adviser faces up to 100 years in prison after pleading guilty to wire fraud Tuesday as part of a $3 million Ponzi scheme.
The US Attorney’s Office said 55-year-old Claus Foerster began stealing from his clients in 2000. Indictments against Foerster claim he would tell clients that he had located better investments than their current portfolio. He convinced many of his clients to withdraw their investment funds and instead transfer them “S.G. Investments,” a fictitious company whose “accounts” he controlled, according to court documents.
“Once the funds were in Mr. Foerster’s account he would simply divert them to his own use,” the US Attorney’s Office said in a release.
Foerster would then create fake account statements that showed the performances of the phony investments and would occasion return some funds to the clients as “profits.” Prosecutors said Foerster was able to cheat more than $3 million out of his clients over a decade.
Prosecutors say Foerster perpetuated the scam while a financial adviser at first Citigroup, then Morgan Keegan & Company, and finally Raymond James Financial. He was terminated from Raymond James in 2014 after the Financial Industry Regulatory Authority, Inc., discovered the deception. The authority disbarred him later that year.
Foerster faces up to 20 years in prison and a $250,000 fine for each of the five counts, although he will likely receive less because he pleaded guilty.