A Pennsylvania investor is suing Captrust Financial Advisors for the alleged failings of a firm it acquired. She claims the RIA should have realized earlier that she’d been swindled out of more than $360,000 of retirement savings.
Jessica Schwarz filed suit in Pennsylvania federal court against Captrust and the company formerly known as Boston Financial Management, a $5 billion firm that Captrust acquired in November of last year.
According to the suit filed by the 75-year-old plaintiff, Schartz opened a Fidelity IRA Rollover account in February 2020 and a second one in July; at that point, she hired BFM as an investment advisor, with Susan Black as the wealth manager assigned to her (Black has since transitioned to Captrust).
In March 2023, Schwartz claimed she fell victim to a scam that would allegedly drain her accounts of hundreds of thousands in savings. It began with what looked like an alert email from PayPal showing a $599 charge to her account, asking her to call a provided number to dispute it.
When Schwartz called the number, she spoke to a so-called PayPal manager named Max, who, in reality, was a scammer who gained access to her computer and banking accounts. The scammers allegedly compromised her Chase checking accounts, which had payment instructions permitting transfers from Schwartz’s Fidelity IRA accounts.
“This appears to have enabled the scammers to transfer funds from Ms. Schwartz’s Fidelity IRA accounts to Ms. Schwartz’s Chase accounts without Ms. Schwartz’s consent,” the complaint read.
Over the next several weeks, the scammers began transferring money from her Fidelity account to her Chase checking account, where they could withdraw the money. By the end, the distributions totaled $368,400. The scammers made it seem like “Chase” was clawing back funds from fraudulent transactions when they were raiding her IRAs.
On March 9, Black texted Schwartz, asking if she was okay and if “it’s you who is in your accounts.” Schwartz reported back that she didn’t know what Black was referencing. Black continued to try to reach out to Schwartz, including after scammers transferred $99,000 from her Fidelity IRA on March 20, asking if the transfers were valid.
But Schwartz was allegedly confused, thinking Black was asking about her transferring money back into (and not out of) her IRAs (Schwartz continued not to know about the scammer’s actions, according to the complaint).
Nevertheless, Schwartz argued that Black and BFM should have understood that Schwartz was unaware of the fraudulent activity and should have shut down the scam long before they froze the investor’s accounts by the end of March.
Captrust did not return a request for comment prior to publication.
Schwartz also claimed that after the fraud, BFM refused to involve itself with Fidelity or the IRS (regarding the tax issues following the transactions).
BFM was founded in 1976 by Board Chairman Richard Morse, who retired after Captrust acquired the firm. It has 45 employees across Boston, Cape Cod and Portland, Maine locations. Former CEO Louis Coriser became a principal and financial advisor at Captrust in the deal.