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A former television financial analyst, James Arthur McDonald Jr., has been sentenced to five years in prison for defrauding investors of millions of dollars and evading authorities for a significant period, as announced by the Justice Department on Monday.
Following his guilty plea for securities fraud on April 7, McDonald, 53, is set to pay restitution to his victims.
“To his victims, [McDonald] appeared to embody the American Dream,” stated prosecutors in a sentencing memorandum. “But as [McDonald’s] victims soon discovered, their trust had been betrayed.”
James Arthur McDonald Jr., a former CNBC guest financial analyst, has been sentenced to five years in prison. (FBI)
Prior to his capture in June 2024 at his Florida residence, McDonald had been on the run for several years. He was then extradited back to California, where he had held positions as the CEO and chief investment officer of Los Angeles-based Hercules Investments LLC and Index Strategy Advisors Inc.
Court documents revealed that McDonald had cut off his previous communication channels and informed an individual of his intention to “disappear” before fleeing.
In 2020, McDonald incurred significant losses amounting to tens of millions of dollars for Hercules clients due to a risky short position he took against the U.S. economy following the presidential election.
James McDonald allegedly took steps to disappear prior to going on the run, authorities said. (FBI)
The Justice Department disclosed that McDonald misappropriated funds by making purchases at a Porsche dealership and transferring money to his landlord in Arcadia, among other actions, resulting in a total loss of around $3 million for his clients.
Furthermore, McDonald provided clients with false account statements and failed to return the full investment to a client who needed the funds for a home down payment.
The Securities and Exchange Commission stated that McDonald raised over $5.1 million from investors and misused more than $2.9 million for personal expenses and Ponzi-like payments.
McDonald faced charges of securities fraud, leading to a federal arrest warrant being issued in 2022.
Greg Norman from Fox News Digital contributed to this report.
