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Connecticut Advisor Pleads Guilty to Ponzi-Like Investment Fraud and Tax Evasion

Posted on March 13th, 2026 at 10:32 AM
Connecticut Advisor Pleads Guilty to Ponzi-Like Investment Fraud and Tax Evasion

From the desk of Jim Eccleston at Eccleston Law

Federal prosecutors announced that investment adviser John A. Masanotti Jr., admitted he defrauded 14 clients from 2016 through 2023 while operating his Darien, Connecticut firm, Middlesex Group LLC.

According to Financial Advisor News, Masanotti owned and managed the firm and represented that he pooled client assets into a foreign currency trading strategy and other investments. Prosecutors determined he instead diverted investor money to personal expenses and to payments sent to other investors. Clients received monthly statements reporting steady profits, but those reported gains did not exist.

According to Financial Advisor News, authorities found little to no legitimate investing activity. Investigators said Masanotti used client funds to pay mortgages tied to him and his spouse, luxury vehicle payments, credit card balances, and other personal obligations.

Prosecutors also stated that Masanotti failed to report more than $3 million in income to the Internal Revenue Service across multiple tax years, creating a tax loss of nearly $1 million. Financial Advisor News adds that investigators further alleged he made false statements to the FBI and filed false records to obstruct the investigation.

Financial Advisor News adds that federal authorities stated the case reflects common warning signs, including opaque pooled investments, consistent paper profits unrelated to market performance, and an advisor who controls both client funds and account reporting.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, investment fraud, ponzi scheme, tax evasion, securities fraud, investment adviser

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