According to the Atlanta Journal Constitution (AJC), Frederick Barton pled guilty today to defrauding a 90-year-old woman, who has Alzheimer’s disease, of almost her entire life savings. Barton will be sentenced for wire fraud on June 23rd.
Barton was fired in 2002 from a national brokerage firm. Thereafter, he began his own investment firms, Barton Asset Management and Twinspan Capital. U.S. Attorney David Nahmias says that during the next five years Barton fraudulently diverted investors money to himself. In total, it is alleged by federal authorities that Barton defrauded investors of at least $2 million.
It is said by authorities that when Barton learned that one of his clients had Alzheimer’s he took $1 million dollars of her assets, placing it into his own personal account. Unfortunately, according to U.S. Attorney Nahmias, the woman’s bank accounts fell from around $1.3 million to less than $100 over a period of 5 years.
It is the hope of U.S. Attorney Nahmias that the guilty plea will send a message to other financial predators. However, this situation should also serve as a warning to investors. I wonder how many of Barton’s clients researched his background. Would they have trusted him had they learned of his firing or the reasons behind his termination? Was there other red flags that would have concerned investors and maybe caused them to find another investment manager? Investor beware!