A former investment advisor was sentenced to 99 months in prison for a long-running scam he used to defraud elderly and unsophisticated clients of about $2 million that he spent on car payments, his children's private-school tuition and other personal expenses.

Michael Donnelly had already submitted to a lifetime ban from the securities industry when he settled civil charges with the SEC last October, agreeing to pay back nearly$2 million he stole from his clients along with over $365,000 in interest.

Read more: Former RIA President Permanently Barred After Stealing $1.9M from Clients

Then, last week, a federal judge in Philadelphia sentenced Donnelly to 99 months in prison to be followed by three years of supervised release after accepting his guilty plea to one count of wire fraud and one count of securities fraud.

Donnelly's attorney, Nancy MacEoin of the Philadelphia Federal Community Defender Office, writes in an email that her client takes responsibility for his actions but was hoping for a lighter sentence.

SOUGHT LENIENCY

"Mr. Donnelly understands [his] conduct (was) very serious and has always had a deep remorse in how his actions have affected the victims in this case," MacEoin says. "He is disappointed in the 99 months sentence imposed by the court. He has been an otherwise law-abiding citizen and is committed to his family and community. The defense believe[s] the substantial mitigation in this case supported a lower sentence than the one imposed by the court."

In a sentencing memorandum submitted by the defendant, Donnelly had appealed for leniency, saying that he "stands before this court humbled, having accepted full responsibility for his actions" and citing a "low risk of recidivism."

He is to turn himself in to federal authorities to begin serving his sentence on June 18.

U.S. District Court Judge Edward G. Smith recommended that Donnelly be placed in a prison as close as possible to his family in Lecanto, Fla., where the ex-advisor, his wife and three sons moved in January 2015.

Donnelly had been president of Coastal Investment Advisors of Wilmington, Del., and Coastal Equities, an affiliated broker-dealer during the period of the fraud, which authorities say targeted elderly and unsophisticated investors. He also held top roles at the RIAs Donnelly Steen & Company and Donnelly Advisors Group.

Donnelly siphoned off his clients' funds, and then issued bogus account statements and trade confirmations to cover his theft. Charging documents say that Donnelly ran the scheme from around November 2007 through summer or fall of 2014. In one instance, Donnelly is said to have obtained $440,000 from a "close friend" identified in court documents only as "KH," pocketed the money and provided fraudulent statements indicating that he had invested the funds in large-cap stocks.

The complaint also describes Donnelly as having made presentations before elderly investors, promising that he could net them better interest rates than what banks were paying. Again, and in numerous other cases detailed in the charging documents, Donnelly is said not to have invested his clients' money in anything, "but rather appropriated it for his own use."

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