PROVIDENCE – A Barrington financial adviser has agreed to plead guilty to six federal counts of theft, tax evasion and running a Ponzi scheme. Patrick Churchville, 47, could face up to 105 years of imprisonment and a fine of $1.4 million.
Churchville is the owner, manager and investment adviser of ClearPath Wealth Management LLC, located in Providence and later, in Barrington. As manager and adviser to several limited liability companies which were also the general partners of three affliliated private funds, Churchville controlled the funds themselves, according to information supplied by U.S. Attorney Peter F. Neronha.
From the spring of 2008 to October 2011, Churchville provided approximately $18 million to JER Receivables LLC, an entity formed in New Jersey, to purchase a portfolio of health care receivables. The receivables were represented to have a 30 percent return rate of investments over a 16-month period.
ClearPath was misled, according to documents, and lost the investors’ funds and did not notify the investors of the loss. Instead, Churchville falsely reported successful rates of return and payment schedules on the investments and subsequently used other investors’ funds and new investments pay off the original investors in JER. In all, Churchville misappropriated $21 million dollars in investors’ funds.
In addition, in 2011, Churchville used investors’ funds without their knowledge as collateral to obtain government and agency bonds in order to purchase his residence in Barrington. The investors were forced to repay the loan. On the same day Churchville transferred $2.5 million dollars of investors’ money to ClearPath’s main operating account, he also transferred $2,292,954.04 to a Rhode Island title company in order to purchase his home. This scheme was concealed through a series of false and misleading accounting entries on CleathPath’s ledgers, leaving out any accounting records to reflect the loan, according to documents of the United States District Court for Rhode Island.
Lastly, Churchville failed to report on his tax form an inaccurate sum of his joint yearly income with his wife. It is expected that he owes over $820,000 to the government.