NEWYou can now listen to Fox News articles!
A former television financial analyst accused of defrauding investors out of millions of dollars and spending years on the run was sentenced to five years in prison, the Justice Department said Monday.
James Arthur McDonald Jr., 53, is also expected to be ordered to pay restitution to his victims following his April 7 guilty plea for securities fraud.
“To his victims, [McDonald] seemed to embody the American Dream,” prosecutors argued in a sentencing memorandum. “But looks can be deceiving, and as [McDonald’s] victims learned, their trust had been betrayed.”
FORMER NBA STAR GILBERT ARENAS INDICTED IN ILLEGAL GAMBLING SCHEME WITH SUSPECTED CRIMINAL FIGURES, DOJ SAYS
James Arthur McDonald Jr., a former CNBC guest financial analyst, has been sentenced to five years in prison. (FBI)
McDonald, who frequently appeared as a guest on CNBC as a financial analyst, was arrested in June 2024 at his Florida home after spending years on the run and extradited back to California, where he was the CEO and chief investment officer of Los Angeles-based Hercules Investments LLC, and Index Strategy Advisors Inc.
Prior to fleeing, McDonald also appeared to have terminated his previous phone and email accounts and told one person that he planned to “vanish,” according to court documents.
In 2020, McDonald “lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftermath of the U.S. presidential election,” prosecutors said.
He misrepresented how the funds would be used and failed to disclose the “massive losses” Hercules previously sustained.
CALIFORNIA MAN ACCUSED BY FEDS OF SCAMMING $2 MILLION FROM PEOPLE ON DATING APPS
James McDonald allegedly took steps to disappear prior to going on the run, authorities said. (FBI)
“He misappropriated most of those funds in various ways, including spending $174,610 at a Porsche dealership and transferring $109,512 to the landlord of a home McDonald was renting in Arcadia,” the Justice Department said.
In total, McDonald lost around $3 million of his clients’ money, prosecutors said.
With his other company, McDonald allegedly sent clients “false account statements, including for one client who invested approximately $351,000, later needed the money to make a down payment on a home, was informed by McDonald that much of the money had been lost, and never got his full investment back.”
CLICK HERE TO GET THE FOX NEWS APP
In total, the U.S. Securities and Exchange Commission said McDonald “raised more than $5.1 million from 23 investors and clients, and misappropriated more than $2.9 million of those funds for personal expenses and Ponzi-like payments to earlier investors.”
A federal arrest warrant was issued for McDonald in 2022 after he was charged with securities fraud.
Fox News Digital’s Greg Norman contributed to this report.
