NH financial adviser gets 8 -year sentence in Maine case
James A. Philbrook was also sentenced to three years of probation and ordered to pay restitution totaling $195,000 by Justice E. Allen Hunter after a two-hour sentencing hearing at the Aroostook County Courthouse. Philbrook was found guilty by an Aroostook County jury in September on two felony charges of theft by unauthorized taking and securities fraud stemming from the 2005-06 scam, which also triggered charges in New Hampshire.
The N.H. Department of Securities Regulation took administrative action against Philbrook on Sept. 7, based on allegations that a Nashua couple lost $20,000 and an Enfield victim lost $22,000 investing in the Carmen Electra scam. The New Hampshire order required Philbrook to pay $237,000 in restitution to victims in both states, a fine of $12,500 and investigative expenses of $10,000.
During the trial in Maine, the state presented evidence that Philbrook, who had been the couple's financial adviser for more than a decade, approached them with a proposal for a pay-per-view cable event. The couple invested $145,000 at first, then another $50,000 based on their long-standing relationship with Philbrook, according to Maine prosecutors.
"In reality, Philbrook used nearly half of the investment to pay back money his son Stefan had embezzled from an employer, and used the rest for his own investments or expenses," said Judith M. Shaw, administrator of the Maine Office of Securities. "The verdict indicated that the jury didn't believe Philbrook's testimony that the funds provided by the St. Agatha couple were merely personal loans that he could use however he wished."
Philbrook, 63, could be subject to criminal prosecution in New Hampshire as well.
Jim Boffetti, an attorney with the consumer bureau in the N.H. Attorney General's office, said his office is consulting with the state Securities Bureau, but could not comment further.
Jeff Pickering, a Houlton attorney representing Philbrook, told the Bangor Daily News after the sentencing hearing that his client would appeal. The newspaper reported that both Maine victims gave emotional testimony at the sentencing hearing, with one of them calling Philbrook "a thief, a crook and a rat."
"Today's sentencing sends a clear message to those who would commit securities fraud," Shaw said. "Maine officials are working hard to protect investors and are taking strong action whenever advantage is taken of individuals, families or businesses in our state. Maine won't tolerate investment scams and outright fraud."