Massachusetts Investment Advisor Respondent in Complaint Alleging Involvement in Fraudulent Medical Marijuana SchemeWednesday, May 29, 2019
Frederick Vincent McDonald, Jr., a former registered investment advisor with US Advisory Group Inc. based in Beverly, Massachusetts, was recently charged with scamming millions of dollars from investors in a fraudulent medical marijuana scheme.
According to the Massachusetts Secretary of the Commonwealth, William F. Galvin, McDonald oversaw the solicitation of millions of dollars from over 100 investors through fraudulent medical marijuana ventures. The Commonwealth alleged that McDonald never received the licenses necessary to create medical marijuana businesses and no dispensaries were opened despite soliciting $8 million in assets from 2013 to 2019. The Commonwealth is accusing McDonald of concealing pertinent information from investors, withholding information about his own conflicting interests in the investments he was recommending, breaching his fiduciary duty to clients, and failing to highlight risk factors in the medical marijuana industry.
Regulators stated in the complaint, “McDonald failed to educate himself regarding the unique and complex licensing process in Massachusetts, which results in the distribution of offering documents that failed to adequately disclose to investors the risks or difficulties the investment could face.” Though McDonald and his partners jointly raised money for the venture, the partners began to dispute about existing arguments and their relationship faltered. The investors never saw a return on their investments because the ventures were unsuccessful.
The complaint also lists several of McDonald’s other companies and corporations, including US Advisory Group, Commonwealth Pain Management Connections LLC and Kettle Black of MA LLC, as respondents. The Commonwealth is seeking disgorgement of ill-gotten gains, restitution for the victims, fines and a permanent bar against McDonald and US Advisory Group.
If you invested and lost money in Frederick McDonald and US Advisory Group’s alleged medical marijuana investment at the advice of a broker, attorney, insurance agent, financial advisor, or CPA, you may be able to recover. Since 1998, the experienced attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.