Barrington man sentenced to 7 years in prison

Patrick Churchville pleaded guilty to wire fraud, tax fraud

Posted 3/21/17

Patrick E. Churchville, 48, owner and president of ClearPath Wealth Management, LLC, formerly located in Providence and Barrington, was sentenced to 84 months in federal prison for orchestrating a …

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Barrington man sentenced to 7 years in prison

Patrick Churchville pleaded guilty to wire fraud, tax fraud

Posted

Patrick E. Churchville, 48, owner and president of ClearPath Wealth Management, LLC, formerly located in Providence and Barrington, was sentenced to 84 months in federal prison for orchestrating a $21 million dollar Ponzi scheme.

Officials said that Mr. Churchville's scheme deceived more than 110 investors; stealing $2.5 million dollars of investors’ funds to purchase a waterfront home on Nayatt Road; and failing to pay more than $820,000 in personal federal income taxes.

SEC charges Barrington man with stealing investors' money.

At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Mr. Churchville to serve 3 years supervised release and to perform 2,000 hours of community service upon completion of his prison term.

Mr. Churchville pleaded guilty on Aug. 4, 2016, to five counts of wire fraud and one count of tax fraud.

An investigation by the FBI, IRS Criminal Investigation, U.S. Postal Inspection Service and the United States Attorney’s Office determined that from the spring of 2008 through Oct. 2011, Mr. Churchville and ClearPath, on behalf of their client investors, invested approximately $18 million dollars in JER Receivables, an entity incorporated in Maryland. At the time of his guilty plea, Mr. Churchville reportedly admitted to the court that in June 2010, he became aware that the investments with JER were no longer producing returns and that ClearPath had been subjected to fraudulent and misleading representations by the principals of JER. 

"He failed to notify his client investors that he had lost millions of dollars of invested funds," stated a release from the US Attorney's office.

Mr. Churchville reportedly admitted that in order to hide the fact that he had lost millions of client investor funds through his dealings with JER Receivables, and to continue to operate his business and reap his investment fees, he "misappropriated approximately $21 million dollars of investment money." 

Mr. Churchville also reportedly admitted that he misused investor money already under his control and obtained new investor funds. He used this money to pay back the JER investors and told them, falsely, that the money was the return on their investments. 

"… to induce new investments to carry out the schemes, he (Mr. Churchville) lied and told investors that ClearPath’s previous investments with JER Receivables had been successful and produced high rates of return," stated the release.

The investigation determined that in 2011, Mr. Churchville created a scheme to obtain $2.5 million dollars, using investors’ funds as collateral without their knowledge, to purchase a home in Barrington. Mr. Churchville failed to report the $2.5 million dollars as income on his personal tax returns, resulting in a loss to the IRS of $820,528.

Mr. Churchville, who has been in court-ordered home detention with GPS electronic monitoring since the date of his guilty plea, was ordered by Chief Judge William E. Smith to self-surrender to begin serving his prison term by April 10.

"A Restitution Order will be issued by the Court at a later date."

Mr. Churchville’s sentence was announced by Acting United States Attorney Stephen G. Dambruch; Harold H. Shaw, Special Agent in Charge of the Boston Field Office of the FBI; Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation; and Shelly A. Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division.

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