A former financial advisor with LPL Financial received a prison sentence of more than eight years after pleading guilty to defrauding clients for millions and tampering with a witness.
James Kenneth Couture misappropriated
Couture, 42, once operated two offices in Worcester and Springfield, Massachusetts, and managed $150 million in client assets. Following his firing by LPL, a divorce from his wife, a suicide attempt, a restraining order to freeze assets such as homes and cars, and a ploy to influence a victim's testimony, the incarcerated former advisor's sentence requires Couture to pay back the brokerage for its $3.2 million in settlements to former clients, court papers and
"My client was grateful that the court accepted the joint sentencing recommendation of the parties," Couture's attorney, Brad Bailey, said in an emailed statement. "In agreeing to it himself, my client also reiterated his genuine and sincere acceptance of responsibility for his actions. He understands that him serving the sentence imposed last week is a further step in the process towards making amends. He looks forward to the day when he will be returned to the community and can once again become a productive and contributing member of his society."
Representatives for LPL didn't respond to requests for comment. It's not clear whether LPL has faced any supervision cases in connection with Couture's case, but the SEC and FINRA often
LPL, which disclosed regulatory expenses of $23.2 million through the first three quarters of 2022,
"LPL discharged Mr. Couture in 2020," a spokeswoman
The sentence came in above respective prison terms of
The case underscores the importance of investigating regulators and firms keeping in contact with witnesses throughout the process to keep them updated and "to let the victims know that they are on their side," he said. "When you have an information vacuum, that's when you have people become vulnerable to these witness tampering attempts."
In violation of a judge's order to avoid all contact with witnesses and victims following Couture's rejection of the May 2021 plea deal and subsequent indictment two months later, he began reaching out to a defrauded client, according to charging documents.
For at least four months, Couture mimicked his earlier scheme of nearly a dozen years by seeking "to exploit his friendship with Victim F by deceiving him into believing that the fraud charges were baseless," the government's sentencing memo stated. He used screenshots and phony documents to make it appear that the client had millions of dollars in his account, all the way until acknowledging in a December 2021 text message that it "doesn't exist and never has."
"Couture's fraud on Victim F was particularly cruel because they were friends, and because Couture led Victim F to believe that Couture had made Victim F rich and had a portfolio valued over $3.5 million," prosecutors wrote in the sentencing memo. "Victim F was sympathetic to Couture right up to the point when Couture admitted that the $3.5 million never existed."
For more than a decade prior to a client's June 2020 complaint to the firm of "irregularities" in their account, Couture "diverted LPL customer funds to a shell company he owned, used other customer's funds to repay the customers he had misappropriated money from and doctored financial statements to make it appear the victims' assets were properly managed," according to a sentencing memo by the defense.
Couture has struggled with alcoholism, and his lawyer wrote that the trauma of being a 9/11 survivor who narrowly escaped death at the World Trade Center has had "a tremendous, lasting effect" on him. Around the time of the initial May 2021 plea agreement, he and his wife of 16 years separated. The following month, she filed for divorce and he tried to kill himself by asphyxiation, the defense sentencing memo stated.
Also in June 2021, prosecutors
Couture "is purposefully sparing the government and the victims of his crimes the emotional strain, expense, time and lost-opportunity costs of a lengthy trial, which to him is the first step towards atonement," the defense memo said. "At the same time, the collateral consequences of simultaneously losing virtually all he holds dear in his life as a result of his actions is likely for him even more draconian than his actual loss of his liberty."
He pleaded guilty to four counts of wire fraud, four counts of aggravated identity theft, one count of investment advisor fraud and one count of witness tampering. The sentence includes three years of supervised release following the prison term. As a former resident of the prosperous town of Sutton, Massachusetts, roughly an hour's drive west of Boston, Couture's story displays the widespread nature of fraud in the industry and the victims of the conduct, Straney said.
"This is not some backwater geography where someone can slip in and pull something over," Straney said. "It goes to show you that this could happen to anyone."
