Former Connecticut Advisor Pleads Guilty In $600K Theft

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that AARON J. JOHNSON, 36, of Haddam, pleaded guilty today before U.S. District Judge Jeffrey Alker Meyer in New Haven to one count of mail fraud stemming from a scheme to defraud clients of his investment business.

According to court documents and statements made in court, JOHNSON was President and Chief Investment Officer of J. Capital Advisors, and was a registered investment advisor until October 21, 2013, when his and J. Capital Advisors' registration was revoked by the State of Connecticut

In approximately April 2010, JOHNSON became a registered investment advisor with Trade PMR, a Florida company that provides brokerage and custody services for registered investment advisors. Almost immediately, JOHNSON began skimming excessive and unearned fees from client accounts. JOHNSON would submit a request to Trade PMR for fees for a particular client supposedly earned during a particular time period, and Trade PMR would, in turn, arrange for those fees to be deducted from the client's account and deposited into a J. Capital Advisors' sundry account over which JOHNSON maintained exclusive control. By December 2012, when Trade PMR terminated its relationship with JOHNSON, JOHNSON had taken a total of $619,231.09 in excessive fees from 19 victim clients.

JOHNSON also attempted to delay and prevent the discovery of the full scope of his scheme by repaying fees he took from one victim, claiming to the victim and to investigators with the State of Connecticut Department of Banking, Securities and Business Investments Division, that the fees were taken out due to a "glitch" in his billing system.

Judge Meyer scheduled sentencing for May 23, 2017, at which time JOHNSON faces a maximum term of imprisonment of 20 years.

JOHNSON was arrested on February 17, 2016, and is currently released on a $250,000 bond.

This matter has been investigated by the U.S. Postal Inspection Service and the State of Connecticut Department of Banking. The case is being prosecuted by Assistant U.S. Attorney Susan L. Wines.