Former Morgan Stanley adviser sentenced to 5 years in prison

James Polese used client money for personal investments, including $100,000 on a wind farm.

A Boston federal court on Tuesday sentenced a former Morgan Stanley rep to five years in prison for his role in stealing almost half a million dollars from clients.

James Polese pled guilty to one count of conspiracy and investment adviser fraud, eight counts of bank fraud and one count of aggravated identity theft in April. In addition to prison time, U.S. Senior District Court Judge Mark Wolf sentenced Mr. Polese to three years of supervised release and ordered him to pay a $30,000 fine and $462,000 restitution.

(More: Former N.J. broker gets prison time for $3.1 million fraud)

His co-conspirator, fellow Morgan Stanley adviser Cornelius Peterson, was sentenced in June to 20 months in prison, two years in supervised release and ordered to pay a $462,000 restitution.

According to a release from the U.S. Attorney’s Office in the District of Massachusetts, Mr. Polese and Mr. Peterson transferred funds out of their clients’ accounts and used them to make their own investments. For example, they used $100,000 from one client to invest in a wind farm and $400,000 from another to back a line of credit in support of the project.

On multiple occasions, Mr. Polese used client funds to pay personal expenses like college tuition payments and credit card bills. Some of the victims were elderly, according to a separate enforcement action filed by the Securities and Exchange Commission in January.

Morgan Stanley terminated Mr. Polese and Mr. Peterson in 2017.