The founder of an investment firm based in west suburban Geneva has been sentenced to five years in federal prison for embezzling client funds to pay for his lavish lifestyle, including a yacht and a luxury vehicle.
Stephen C. Browere, 57, of Geneva, the founder and principal of Stephens Capital Management Inc., pleaded guilty in June to one count of mail fraud, according to the U.S. Attorney's office.
Browere used the promise of lucrative and guaranteed returns to persuade several clients to purchase $1.66 million in promissory notes in Douglas Capital Corp., which was based in Lisle.
He did not tell his investors that his relative was the president of Douglas Capital, according to prosecutors. He himself ran the corporation's day-to-day operations, and had access to its lines of credit.
Browere used the money to perform trades within his own investment portfolio, and to cover personal purchases including a yacht and BMW, prosecutors said.
He also concealed the fraud by using some principal payments from some investors.
Assistant U.S. Attorney Patrick Otlewski said in the government's sentencing memorandum, "each investor thought defendant was investing his or her money in safe, stable investments that would provide income well into retirement. They did not agree to give defendant free reign to use the savings as his personal slush fund to support a lavish lifestyle."
Browere also obtained power of attorney on behalf of an elderly client who was infirm and suffering from dementia, prosecutors said. The power of attorney gave him access to the client's cash and property, which were valued at more than $2.1 million. He used some of the money to buy four vacant lots in Lisle and make interest payments to other clients.
U.S. District Judge Matthew F. Kennelly sentenced Browere Friday to 60 months in prison, and also ordered him to pay $3.7 million in restitution to the victims.
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