June 20, 2018
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Former stockbroker convicted of bilking St. Agatha couple out of $195,000

By Dawn Gagnon, BDN Staff

GARDINER, Maine — Maine Securities Administrator Judith M. Shaw and Attorney General William J. Schneider announced Friday that former New Hampshire stockbroker James A. Philbrook was found guilty of two felony charges stemming from a 2005-06 investment scheme that cost a St. Agatha couple nearly $200,000.

During a jury trial in Aroostook County, a state prosecutor presented evidence that Philbrook, who had been the couple’s financial advisor for more than a decade, approached them with a scheme for developing a pay-per-view cable TV production featuring the entertainer Carmen Electra.

The couple initially invested $145,000 based on their long-standing relationship with Philbrook and his claim that their investment in the production would make a substantial return. In reality, Philbrook used nearly half of the investment to pay back money that his son, Stefan, had embezzled from an employer. He used the rest for his own investments or expenses.

The state also presented evidence that Philbrook then solicited another $50,000 investment from the couple and spent that money on personal expenses.

The jury’s verdict indicates that they disbelieved Philbrook’s testimony that the funds provided by the St. Agatha couple were merely personal loans and that he could use the funds however he wished.

“We are gratified that the jury found Mr. Philbrook guilty of securities fraud and theft in this case,” Shaw said. “Philbrook brazenly exploited the relationship of trust that he had developed with Maine investors over a period of years.”

“Mainers should be able to rely on the representations of their financial advisors and we will pursue and prosecute professionals who steal from their clients,” Schneider said. “We will continue to work closely with the Office of Securities to ensure that investors are protected from this kind of illegal conduct.”

Philbrook is scheduled to be sentenced by Justice E. Allan Hunter in October. The case was investigated by Christian Caruso and Jacqueline Drouin of the Maine Office of Securities and prosecuted by Maine Assistant Attorney General Michael Colleran.

The New Hampshire Bureau of Securities Regulation took administrative action against Philbrook on Sept. 7 for the same conduct.

The New Hampshire board issued an order demanding that Philbrook return $237,000 he wrongfully obtained from investors in New Hampshire as well as the St. Agatha couple. In addition, he was fined $12,500, required to reimburse the board $10,000 for its expenses and ordered to cease and desist from any further violations of the securities laws.

Consumers are encouraged to contact Maine’s Office of Securities to check an adviser, salesperson or investment or for other information related to investing. The office can be reached at 877-624-8551, through its website at www.investors.maine.gov) or by writing to Maine Office of Securities, 121 SHS, Augusta, ME 04333-0121.

The Office of Securities is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers and other. For more information about the department, visit www.maine.gov/pfr.

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