ANDERSON (AP) — A Greenville attorney will serve about six years in prison in a securities fraud case involving an Easley firm.
Fredrick Scott Pfeiffer, 47, was sentenced Wednesday in Anderson after pleading guilty to one count of conspiracy and two counts of securities fraud, according to Attorney General Alan Wilson, whose office prosecuted the case.
Pfeiffer was indicted earlier this year. Authorities said he withheld key information from investors in Capital Investment, and that he and another man did not tell investors that officers of the firm’s parent company had been removed for improper financial transactions.
The other defendant, Arthur Field, pleaded guilty to 11 fraud charges in May.
Pfeiffer had been an attorney for Capital Investment and also had ownership interests and managerial roles in related entities, including Cosimo, LLC, Wilson said. Authorities said Pfeiffer used Cosimo to loan new money from Capital investors to debtors with insufficient funds or collateral but continued to collect his own fees and profits from each transaction.
Capital still owed $38 million to investors when it closed in 2008.
Prosecutors say Capital Investment’s business plan was patterned after that of HomeGold Financial and Carolina Investors Inc. Thousands lost $275 million in the companies’ 2003 collapse. Six executives were convicted.
Circuit Judge Cordell Maddox, who sentenced Pfeiffer, said an amount for restitution would be determined later. A court-appointed receiver is trying to recover the firm’s assets so that investors can be repaid.
During the hearing, Pfeiffer apologized for his actions.
“I did wrong,” Pfeiffer told the judge, according to the Greenville News. “I am deeply sorry for the actions of mine that contributed to the losses that were suffered by these investors.”