A former adviser at Morgan Stanley stole $5 million from clients to fund his “lavish lifestyle” that featured flights on private jets and a house outside of Las Vegas, according to the U.S. Attorney’s office.
Barry Connell, 50, who worked in the wirehouse’s New Jersey office, was arrested last Friday in Henderson, Nevada, a Las Vegas suburb and criminally charged with wire fraud and aggravated identity theft, according to authorities.
Connell misappropriated clients’ money for his own benefit, authorities charge. From December 2015 to November 2016, Connell conducted more than 100 unauthorized transactions, taking $5 million from five different accounts of a single family, the criminal complaint said. He claimed he had received verbal permission from his clients.
“Connell used his clients’ bank accounts as his own,” said Preet Bharara, U.S. Attorney for the southern District of New York.
Connell was detained in Nevada and hasn’t been transferred to New York yet, the U.S. Attorney’s office said.
Erica Choi, an assistant federal defender who represented him at an initial appearance in Las Vegas federal court, did not reply to a request for comment. Amy Gallicchio, a federal defender who will represent Connell during his trial at the federal court in New York, could not be reached for comment.
Connell used over $1.6 million of his clients’ money for private jet services alone, according to the transaction records listed in the criminal complaint. He also allegedly spent over $2 million in stolen funds to pay his wife’s credit card, and put down $50,600 for an upfront payment for the rental home in Henderson where he was arrested. Other transactions include payment for new cars, country club membership and a $266,000 yacht, the data in the court document shows.
Connell maintained one of the clients’ checkbooks as he was directed to help pay the client’s bills. This client signed multiple blank checks for Connell, authorities said.
“Connell stole funds from clients who entrusted him [with] their finances, choosing to fund his own lavish lifestyle rather than fulfill the fiduciary duty he owed them,” said Andrew M. Calamari, director of the SEC’s New York Regional Office, which also investigated the case and sued Connell in a civil action.
Morgan Stanley fired Connell in November, citing his alleged unauthorized withdrawals from clients' household accounts to third party payees for his own benefit, according to a note in his FINRA BrokerCheck record.
“We have been cooperating with law enforcement regarding this matter, and continue to do so,” a spokeswoman from Morgan Stanley said in a statement.
Connell had been a registered broker for 18 years, per BrokerCheck records, and had two previous client complaints settled for a combined $75,000. The clients alleged that he executed trades without authorization and failed to follow instructions to sell stock in a timely manner, according to notes in his BrokerCheck record.
