Investment Advisor Sentenced to Prison

May 11--SMITHFIELD -- A former Smithfield investment adviser will spend the next decade in prison for stealing millions from his clients.

On Thursday, Charles Mark Hall, 52, pleaded guilty to 12 counts of embezzlement by an insurance agent and two counts of exploiting the trust of a disabled or elderly person. Prosecutors dismissed one count of embezzlement and one count of exploiting trust. Prosecutors think Hall took $2.6 million from the investment accounts of 13 clients.

Superior Court Judge Marvin Blount III sentenced him to two back-to-back prison terms of 60 to 81 months, for a total of 10 to 13.5 years. He'll eventually be eligible for work release, but any money he earns will go toward paying nearly $3 million in restitution.

Hall owned Market Street Advisors and Riverside Cafe, both in downtown Smithfield. He shuttered both businesses shortly before his arrest in September 2009. He has been held at the Johnston County Jail since his arrest and has served about 20 months of his sentence.

"It was a sad chain of events for all involved, and we hope that it now brings closure for the victims and for Mark and his family," Hall's lawyer, Joy Jones, said Friday.

Assistant District Attorney Paul Jackson said he was pleased with the sentence, though he'd pushed for a longer prison term.

Evidence presented at the sentencing hearing tells a tale of a businessman who stole from his clients to keep his family and business afloat during the recession.

A loyal benefactor

Hall's first victim was Florence Aldridge, a La Grange resident and one of Hall's most loyal clients. She died at age 70, two months after Hall's 2009 arrest.

According to his written confession to investigators, Hall met Aldridge in the early 1990s after she'd inherited millions of dollars. He said they talked often, and she moved her investments each time he changed companies.

Aldridge started giving Hall gifts, including shirts, lamps and statues, he wrote. Eventually the gifts became monetary, and Aldridge put up $559,500 to help Hall bankroll his real-estate projects, including his downtown office suite and the Riverside Cafe across the street.

"She often said she would rather give me the money for these projects than let her daughter Amy get it," Hall wrote in the confession.

In addition to the gifts, Hall took $874,694 from Aldridge's investment accounts, the investigation found. She was the only client Hall stole from before 2007.

If Hall is granted work release, he'll owe $1.6 million in restitution to Aldridge's estate. The figure includes the money she gave him.

Recession hits

The financial crisis that hit in 2008 took a huge toll on Hall's business. According to a sentencing memo, Market Street Advisors had close ties to Bear Stearns and AIG, and as those companies crashed, Hall's firm suffered. He was also doing business with Wilmington-based Cape Fear Bank, which shut its doors around the same time.

In the fall of 2008, Hall got an audit notice from the Internal Revenue Service demanding $230,000 in back taxes. And across the street, Hall's Riverside Cafe was losing money, so he put it up for sale.

But few outside of Hall's firm knew of his troubles. Between 2007 and 2009, his staff grew from two employees to 10. "Mark Hall attempted to grow his way out of his financial situation," Jones, the defense attorney, wrote in the sentencing memo. "He was heavily invested in the appearance of success to the point of expensive monthly dinners and marketing events with local banking industries."

At home, Hall faced the costs of his daughter's private college education and his son's health problems. And in 2009, his father died. "Mark had lost his advice, his guidance and his moral compass," Jones wrote. "Mark Hall could not admit that his company was a failure or that a broker could make such a bad investment as Riverside Cafe."

'Robbing Peter'

In 2008 and 2009, Hall encouraged a number of his customers to transfer money between investment accounts. But he never put the money in other accounts, instead depositing the checks into his personal and business accounts. Among the victims was Joe Raulerson, who lost $40,000. "I used his money to keep my business afloat," Hall said in his confession.

From 11 other clients, Hall stole amounts ranging from $5,000 to $263,000. In addition to Smithfield professionals like optometrist Michael Haines, Hall stole from two elderly clients, including an 86-year-old Selma man.

He invited some of his victims to his daughter's wedding in June 2009. By that point, according to Jones, Hall knew he'd soon be caught.

"He knew that the end of his 'robbing Peter to pay Paul' time was near," Jones wrote in the memo. "He was only a robotic part of the wedding festivities."

Exposed by accountant

In December 2007, Hall asked Janice Honeycutt to transfer $54,000 between accounts but then pocketed the money, according to Hall's confession. Months later, her accountant, Tim Grady, questioned Hall, who put the money back, but Grady wasn't satisfied.

"Tim Grady kept asking for supporting documents showing the whereabouts of the $54,000," Hall wrote in the confession. "I then made up some false bank statements from KS Bank, which Tim Grady took to the president of KS Bank, Harold Keen, who correctly identified them as false documents. Thus began the unraveling of my systematic misappropriation of funds that I had been doing mostly since 2007."

KS Bank immediately severed ties with Market Street Advisors and Cantella, the Boston-based company Hall was affiliated with. That prompted Cantella to conduct an internal investigation. The company ultimately notified police and the N.C. Department of Insurance, which began the criminal investigation leading to Hall's arrest.

Remorse, betrayal

According to the sentencing memo, Hall cooperated with Cantella and the criminal investigation, even calling clients into his office to admit to the theft. He gave up his professional licenses.

"He is an extremely remorseful person who has fully accepted responsibility for his actions," Jones wrote.

In jail, Hall has served as a trusty. He's studying the Bible and ministering to other prisoners, according to Jones.

About a dozen friends and family wrote letters to the judge in support of Hall. His wife, Susan, said in her letter that she's forgiven her husband.

"He was a person who was driven to a selfish extent of how much he could grow his company," she wrote.

Since Hall's arrest, all but one client has been repaid, mostly through settlements with companies Hall was affiliated with. Only Aldridge's estate still has legal action pending, said Jackson, the prosecutor. Hall's restitution will go mostly to the companies' escrow accounts.

But Jackson added that the victims' pain goes beyond their bank accounts. "They still feel betrayed, and they don't think they'll ever get over that," he said. "We hope that [the sentence] brings them some measure of closure."

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