San Diego-Based Investment Advisor with Criminal Past Allegedly Defrauds Investors in Ponzi Scheme

San Diego-based investment advisor, Christopher Dougherty has been arrested for allegedly defrauding mostly senior investors in a multi-million-dollar Ponzi Scheme. The District Attorney’s office charged Mr. Dougherty with 82 felonies that include grand theft, financial elder abuse and securities fraud for activity between 2015 and 2018. According to allegations, Dougherty offered his clients the “opportunity” to invest in his private companies and non-existent tax-free private placements, promising around 5% in quarterly dividends. Meanwhile, Dougherty allegedly used investor money for his expenses and to pay some falsified “returns” to maintain the scam. For this alleged conduct, the SEC has charged Christopher Dougherty, along with his entities, C&D Professional Services, JTA Farm Enterprises, and JTA Real Estate Holdings for securities laws violations. Upon investigation, our securities fraud lawyers find many similarities between the alleged activities and other Ponzi Schemes.

A Ponzi Scheme is a type of investment fraud that uses investors’ money to pay falsified “returns” to other investors. The falsified returns provide the investors with the illusion that their money is producing genuine profits from investments. In reality, Ponzi Scheme perpetrators use the money meant for investments on personal expenses and maintaining the fraud, as suggested with this case. Ponzi Schemers usually gain the trust of their unsuspecting victims to get the funds. All Ponzi Schemes end when the perpetrator is not able to pay the investors their requested money, as seen with Mr. Dougherty. Eventually, there are not enough new funds coming in that can be used to maintain the Ponzi Scheme.

The SEC complaint alleges that Mr. Dougherty raised over $7 million through providing fraudulent advisory services through his firm, C&D Professional Services, Inc. Investors were allegedly offered the opportunity to invest in his organic beef ranch, a marijuana cultivation plan, and real estate holdings. Rather than using the investor funds to generate profits, Mr. Dougherty allegedly just shuffled the money around at his discretion.  Mr. Dougherty allegedly used received investor funds to pay falsified returns to others, including payments to anyone who complained. Additionally, Dougherty spent the money on traveling, home remodeling, college tuition, and other personal expenses.

The alleged Ponzi Scheme victims included elderly homemakers, hospital staff, school district employees, veterans and other unsophisticated investors. The San Diego DA office reports that over half of the alleged victims were at least 65 years old. Investors have come forward with claims that Mr. Dougherty took all of their retirement funds and even threatened that those who hired a lawyer “wouldn’t see a dime.” Mr. Dougherty met a number of his victims during his time as an investment advisor for several school districts and as clients during his time at his former brokerage firm. Many of Mr. Dougherty’s clients perceived him as a friend with whom they shared dinners with occasionally.

Mr. Dougherty has a blemished past from even before these accusations, according to his record available online. For 14 years, Mr. Dougherty worked under FINRA’s jurisdiction at Sagepoint Financial, Sentra Securities Corporation, Lindsco/Private Ledger Corp, Valic Financial Advisors, the Variable Annuity Marketing Company and WMA Securities. Per his CRD records on BrokerCheck, Mr. Dougherty (CRD # 2974523) pled guilty to a misdemeanor for “borrowing” funds from a local Little League team. Research into Mr. Dougherty’s background would have raised flags about his character. Given cases like this, our securities fraud attorneys always encourage investors to research a financial professional before onboarding their services.

As expected, Mr. Dougherty eventually could no longer afford to pay back investors and declared bankruptcy, with many investors left without their money. The district attorney’s office asserts that there are many more victims of Charles Dougherty’s alleged Ponzi Scheme who have yet to come forward. Our securities attorneys have successfully helped many victims of Ponzi schemes recover millions in losses in the past. Under industry rules, broker-dealers can be held financially responsible for wrongdoings that registered representatives commit under their supervision. Investors who lost money from their brokerage account under any FINRA registered firm could be eligible to collect their money. For more information, call our securities fraud attorneys.