A former Newfoundland and Labrador investment advisor who swindled at least $710,000 from elderly clients over a 13-year period has been ordered to pay the money back and serve a federal prison sentence.
Joan McCarthy, 54, worked at MD Financial Management, an investment company which serves physicians and their families. The fraud was discovered during a company audit in 2019 and was reported to the Royal Newfoundland Constabulary, a St. John’s court heard Wednesday afternoon.
McCarthy, who was employed at the company since 2000, had already quit by the time the fraud was discovered.
McCarthy had been facing 24 charges, including multiple counts of fraud over $5,000, forgery, uttering a forged documents and possessing property obtained by crime.
She later pleaded guilty to five charges, admitting to defrauding one couple of over $357,000, a woman out of over $260,000 and taking over $92,000 from a male client. There had been other victims, but they have since died, said Crown prosecutor Scott Hurley.
“Just that I’ve hurt a lot of people. I’ve hurt my victims, I’ve hurt my family and coworkers. I regret that and I’ll regret that for the rest of my life,” McCarthy said when asked if she wanted to address the court.
The Crown and defence offered an agreed statement of facts and asked that McCarthy serve a federal prison terms of two years plus one day, and be ordered to pay MD Financial Management $184,954 in restitution.
McCarthy’s lawyer John Duggan explained that RBC returned over $500,000 to MD Management to repay victims of McCarthy’s fraud. He said the bank has civil litigation pending against McCarthy and, as a result, he did not think the court should order RBC to be paid in restitution.
Judge James Walsh disagreed.
“Why not include the amount the bank is out?” Walsh asked, asking both sides to take a break to reconsider their submission.
“The fact is your client committed a fraud of $710,000 and any less than that amount means she profited by her own ill … behaviours.”
After a short break, Duggan returned and said his client said, “I take full responsibility, it was my actions that caused this, RBC should take the full restitution of [$515,739].”
Budging on the restitution ended in McCarthy’s favour when it came time for Walsh to accept or deny the joint submission of a two-year-plus-a-day sentence, one he said was on the low end of the sentencing range.
“The acquiescence to full restitution actually helps Ms. McCarthy in convincing me that I’m now in the range. Without that I would not have imposed the sentence,” Walsh said.
Why did she do it?
A pre-sentence report given to the court indicates McCarthy is remorseful and is at a low risk to reoffend.
Duggan said his client is not a gambler, drinker or drug user, and that the fraud was motivated by personal financial gain. He said her behaviour was in an attempt “to meet emotional needs as much as financial needs.”
Duggan pointed to “lifestyle issues” and McCarthy being “extremely overwhelmed looking after her young children and aging father.”
He said McCarthy “hopes something positive comes out of this so her children will know when you do wrong you should fess up and face the consequences.”
In addition to her criminal case and upcoming civil litigation, McCarthy was fined $1 million by the Investment Industry Regulatory Organization of Canada in January. She was also ordered to pay more than $100,000 for costs associated with her disciplinary hearing.
“She acknowledged and realized it was wrong,” said Duggan, who was retained by McCarthy before she was criminally charged.
“Financially she is ruined. She will not recover in her lifetime. She knows that.”