Richmond financial advisor found guilty of fraud in federal court

Published 12:04 pm Wednesday, February 8, 2023

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A Lexington area investment advisor and attorney, Douglas Hawkins, of Richmond, has been found guilty by a federal jury at U.S. District Court in Lexington of investment advisor fraud, securities fraud, and two counts of mail fraud.

The U.S. Attorney’s office for the Eastern District of Kentucky says according to the evidence presented during the trial, while operating as an investment advisor, Hawkins encouraged his clients to invest in securities, which were properties in Jackson, Mississippi.  Clients invested over $2 million in the properties.

Hawkins withheld vital information about the properties when advising his clients to invest, prosecutors said, including that many were uninhabitable, rent collection was burdensome, and that the properties were often subject to theft and vandalism.  He also failed to inform his clients that their investment money would be used for purposes other than their properties, including paying other investors and buying a Harley Davidson for an employee.

The investigation was conducted by both the United States Postal Inspection Service and the Kentucky Department of Financial Institutions.

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Hawkins, who was indicted on the charges in October 2021, is scheduled to appear for sentencing on April 24, 2023. He faces up to five years in prison on the investment advisor count, up to 20 years in prison on the securities fraud count, and up to 20 years in prison on each count of mail fraud.

However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing a sentence.  Hawkins also faces potential fines and a judgment of restitution, as ordered by the Court.