Stockbroker Sentenced to Prison for Scamming Senior Citizens

February 25, 2013 by Thomas F. Burke, P.C.

It seems particularly heinous when the victim of a stockbroker scam is a senior citizen. Recently, a stockbroker was sentenced to five years in prison for fraud and filing a false tax return after stealing more than $1 million from an elderly client and his heirs.

The stockbroker, Michael Montgomery, started as an investment advisor for the elderly man living in Lake Tacoma and later became the trustee of the man's living trust. He also gained power of attorney over his client. From 2003 through 2007, Montgomery misappropriated money from the elderly man's bank and investment accounts and sent $654,600 from the client's Charles Schwab account to another bank account, whereupon Montgomery took the money for his own personal spending.

Montgomery wrote a further $598,916 in checks to himself from his client's account from January 2004 to July 2006, supposedly as payment for services to his client. After the client died on July 18, 2006, Montgomery wrote an additional $243,745 in checks to himself from the client's estate for "estate services". However, he never told the client's surviving family members what any of these services were, nor did he report the income on his tax returns.

U.S. District Judge Robert J. Bryan thinks that Montgomery may have been committing fraud even before 2003. According to the judge, there is a "high probability" that Montgomery has been stealing from his victims since 2001.

In 2009, the Washington State Department of Financial Institutions revoked Montgomery's registration as a securities dealer for unethical conduct. According to the prosecutors, he has shown absolutely no remorse for his actions. He continues to pursue hobbies and has not attempted to begin earning back the money for his victims.

He appears to be "arrogant and shameless".

Montgomery pleaded guilty to the charges against him in June. In the testimony he gave at his sentencing, he confessed to stealing from his client and his client's heirs. He also admitted to billing the client's estate for things like driving his client's truck and visiting his client at a nursing home.

While many of us think the elderly victims of fraud, such as the one described above, are weak and gullible, making them easy targets, in fact that is often not the case. According to Gerry Walsh, president of the Financial Industry Regulatory Authority Investor Education Foundation, many victims of such fraud, in actuality, tend to be "married, college-educated males with above average incomes and above-average levels of financial literacy." Far from easy prey, schemes to victimize seniors actually tend to be highly sophisticated and involve influencing the victim.

Thomas F. Burke and Terrance Buehler collectively have more than sixty years of experience helping investors who have suffered losses as a result of misconduct by securities issuers and securities brokers. . If you feel that you have been defrauded by your stockbroker, please contact Mr. Burke at 312/362-1300 or by email at