Lawrence Allen DeShetler, an investment adviser in The Woodlands, convinced five clients – two of whom were in their 80s – to cash out legitimate investments and transfer the money to him so he could get them higher returns.
DeShetler instead deposited the money into bank accounts over which he had sole authority, defrauding the clients of $1.9 million – and ultimately landing himself in prison. On Nov. 2, U.S. District Judge Marcia A. Crone of the Eastern District of Texas sentenced DeShetler to 60 months in prison and ordered him to pay restitution of $948,058.
DeShetler pleaded guilty in June to federal mail fraud charges. The office of Acting U.S. Attorney Brit Featherson prosecuted DeShetler.
Texas State Securities Board attorneys and a financial examiner assisted in the investigation and analysis of financial records.
Investors received some of their money back before the order of restitution. Local and federal law enforcement authorities seized DeShetler’s bank accounts and took other steps to return approximately $857,000 to investors.
DeShetler’s clients were mostly invested in mainstream financial products like stocks, mutual funds, annuities, and insurance policies. The clients, however, bought DeShetler’s pitch that he could make them more money if he controlled the funds.
“Investors should be extremely careful when they’re approached with an offer for the ‘next big investment,’ especially where retirement accounts are concerned,” Commissioner Iles said. “DeShetler absconded with his clients’ money by asking them to simply trust him.”
DeShetler convinced an 83-year-old client to liquidate an existing trust account and transfer $187,699 to himself. The woman’s husband had died in 2015, and in May 2016 she allowed DeShetler to stay at her home while she visited her son. When she returned six weeks later, all her investment documents were missing. DeShetler was gone as well.
Another client, aged 64, cashed out her individual retirement account (IRA) and sent DeShetler a check for $726,985. DeShetler told her he would deposit it in a new IRA. Instead, he deposited the full amount into a bank account over which he had sole authority. DeShetler did the same thing with money he received from four other clients.
DeShetler spent some of that money on run-of-the-mill expenses like restaurant and bar tabs, country club fees, clothes, and pool cleaning services.
He also had grander plans for his clients’ money, using funds to make a down payment to begin construction on a house in Nicaragua, where he spent part of 2016. DeShetler never saw his house completed, however. He returned to Texas in mid-2016 after local law enforcement authorities seized his bank accounts.
DeShetler was soon arrested and jailed in Montgomery County — where he stayed until pleading guilty in U.S. District Court.
The case was investigated by the FBI, Texas State Securities Board, law enforcement officials in Montgomery, Orange, and Jefferson counties, and the Texas Department of Public Safety.