The Securities and Exchange Commission this week ordered former Chelsea Planning Committee member and investment adviser Gary J. Martel to pay $7.2 million in restitution and penalties for taking money from clients and never investing it as promised.
Martel, 55, pled guilty last month to criminal wire and mail fraud charges in federal court in Boston. The US attorney’s office said in court documents that from 2004 to 2012 Martel received $5.4 million from investors and paid back only $2.1 million, keeping $3.3 million for himself. His sentencing is scheduled for March; he faces up to five years in prison and a $250 million fine.
The SEC’s order said Martel misrepresented to clients that he would invest their funds in bonds, mortgage-related securities, cash reserves, and stock offered by Facebook Inc. in an initial public offering.
The Massachusetts Securities Division filed a civil complaint against Martel last June. A lawyer for Martel did not return a request for comment.