Jerry Pearson Sentenced for Wire Fraud and Stealing Client Money
Summary
Jerry O. Pearson was sentenced to 63 months in prison for wire fraud and stealing $3,431,152.21 from clients of his retirement services company. The Louisiana Office of Financial Institutions assisted in the investigation.
What changed
Jerry O. Pearson, 62, of Alexandria, Louisiana, has been sentenced to 63 months in federal prison and ordered to pay $3,431,152.21 in restitution for a wire fraud scheme. Pearson, owner of Mid South Retirement Services, LLC, defrauded clients by transferring funds from Self-Directed Individual Retirement Accounts (SDIRAs) that his company held as custodian to his own controlled accounts between 2012 and 2021. He pleaded guilty to one count of wire fraud on August 16, 2024.
This case highlights the severe consequences of financial fraud and the importance of robust oversight in the management of retirement assets. While this is an individual enforcement action, regulated entities, particularly those managing SDIRAs or other client funds, should review their internal controls and compliance procedures to prevent similar misappropriation. The investigation involved the FBI and the Louisiana Office of Financial Institutions Securities Division, indicating potential for inter-agency cooperation in pursuing financial misconduct.
What to do next
- Review internal controls for client fund management.
- Ensure compliance with SDIRA custodian regulations.
- Reinforce policies against unauthorized fund transfers.
Penalties
63 months in prison, 3 years of supervised release, and $3,431,152.21 in restitution.
Source document (simplified)
On January 30, 2025, Jerry O. Pearson, 62, of Alexandria, Louisiana, was sentenced in United States District Court for committing wire fraud. Pearson was sentenced to 63 months in prison, followed by 3 years of supervised release, and ordered to pay restitution to his victims in the amount of $3,431,152.21.
According to information presented in court, Pearson was the owner/operator of Mid South Retirement Services, LLC (“Mid South”) located in Boyce, Louisiana, from 2012 to 2021. Pearson managed Self-Directed Individual Retirement Accounts (SDIRA), which is an IRA held by a custodian that allows investment in a wider range of assets than most conventional IRA custodians permit. Mid South served as the custodian of SDIRAs and managed approximately $40 million in assets. Pearson created a scheme to defraud clients where he would take funds that Mid South was holding as the custodian, and transfer them to other accounts he controlled, without the client’s permission. In total, during the scheme, Pearson transferred $3,431,152.21 in client funds from the Mid South client funding bank account to other accounts he controlled. Pearson then used the funds for himself, as well as the benefit of his family and other companies that he controlled. In order to keep the scheme from being detected, Pearson would misrepresent to clients that he was investing the funds as they had directed, when, in fact, he was taking the money. Pearson pleaded guilty on August 16, 2024, to the Bill of Information charging him with one count of wire fraud.
The investigation into Pearson’s activities was conducted by the Federal Bureau of Investigations with assistance from the Securities Division of the Louisiana Office of Financial Institutions. The prosecution was handled by the United States Attorney’s Office for the Western District of Louisiana.
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