PEORIA — Former Urbana investment adviser Timothy J. Roth pleaded guilty Tuesday to mail fraud and money laundering in connection with a fraud scheme that cost clients about $16 million.
Appearing before U.S. District Judge Michael Mihm in Peoria, Roth admitted defrauding 11 victims, including companies and individuals, of about $16 million.
Roth, 56, of Stonington, is scheduled to be sentenced July 24, 2012. Mail fraud carries a maximum penalty of 20 years in prison, while money laundering carries a maximum penalty of 10 years in prison.
Roth could also be ordered to pay restitution to the victims.
According to court documents and statements during Tuesday's hearing, Roth admitted he fraudulently transferred, liquidated and removed mutual fund shares from clients' accounts for his own business and personal use.
The actions took place between August 2006 and March 2011, when a telephone inquiry from an investment advisory company to the Champaign Police Department triggered an investigation.
That investigation ended up involving the FBI, the Internal Revenue Service, the U.S. Postal Inspection Service, the Securities Department of the Illinois secretary of state's office and the Champaign Police Department.
The Securities and Exchange Commission filed civil charges against Roth in federal court earlier this year.
Since June 2002, Roth had worked in Champaign as a federally registered investment adviser for a capital management company. He had also formed and operated several personal consulting companies.
According to a news release from the U.S. attorney's office, clients developed a level of trust in Roth over the years, and the level of authorizations extended to him increased.
For example, standing client authorizations allowed clients to verbally authorize Roth to move funds, removing the need for written authorization to move funds.
Assistant U.S. Attorneys David H. Hoff and Eric I. Long are prosecuting the case.