PHOENIX (CN) – A 93-year-old blind widow says James J.F. Buchanan stole “what remained of her life savings as part of a $5 million Ponzi scheme he ran while [co-] defendants LPL Financial Corp., a national brokerage firm, and LPL supervisor Joseph B. Garner Jr. supervised him from 2006 to 2008.” She claims Buchanan preyed on elderly widows, stole insurance money they received from their husbands’ estates, and “took advantage of his victims’ religious faith and trust in him as a leader in his church.”
The complaint states: “In March 2008, law enforcement officials began investigating Buchanan as a con artist who lied to widows and elderly couples in order to steal their life savings. Since 2001, Buchanan took advantage of his victims’ religious faith and trust in him as a leader in his church. He especially targeted the elderly. He lied to widows to steal the proceeds of their deceased husbands’ life insurance proceeds. He stole $1 million from his own church, which had entrusted him with its building fund. Mr. Buchanan stole from many of his elderly victims, including [plaintiff] Pat Westerby, knowing that they have no ability to re-enter the work force to attempt to support themselves.
“According to law enforcement officials, Buchanan stole in excess of $5 million from at least 40 victims by using the same modus operandi he used to commit and Conceal his crimes against Pat.
“Buchanan was only able to steal Pat’s money because LPL and Garner knowingly violated NASD Rule 1031 and completely failed in their supervisory and compliance duties regarding Buchanan.”
The complaint says Buchanan worked for American Express Financial Advisors, later known as Ameriprise Financial Services, from 1994 until it fired him in January 2006. It claims LPL and Garner let Buchanan “solicit investors and conduct securities business through LPL” from January through May 2006, “even though he was not registered with LPL. LPL and Garner allowed Buchanan to ‘work off the books’ during this period. Buchanan used this opportunity to defraud Pat Westerby and several other investors.”
And it claims that LPL ignored a series of red flags after Buchanan applied to work for it in May 2006, including a credit report that showed he had $1.2 million in debts and was delinquent on his $8,227 monthly mortgage and $2,212 monthly car payment.
The widow demands punitive damages for fraud, negligence, and other charges. She says that after the Maricopa County Attorney “recorded a RICO lien” on Buchanan’s palatial home in Phoenix, he moved to Dewey, Ariz., where he lives now.
This 23-page complaint is full of alarming allegations of Buchanan’s extravagant lifestyle and LPL’s refusal to see the obvious.
The widow is represented in Maricopa County Court by James Burgess with Fennemore Craig.