LEXINGTON, KY - The U.S. Attorney's Office, Eastern District of Kentucky is reporting that a Lexington investment advisor and attorney, Douglas Hawkins, was sentenced to 120 months in prison Tuesday, by U.S. District Judge Karen Caldwell, for investment advisor fraud, securities fraud, and two counts of mail fraud.
According to the evidence at trial, while operating as an investment advisor, Hawkins encouraged his clients to invest in securities that were properties in Jackson, Mississippi. Clients invested over $2 million in the properties. While encouraging these investments, Hawkins withheld vital information about the properties from his clients, including that many were uninhabitable, had burdensome rent collection, and were often subject to theft and vandalism. He also failed to inform his clients that their investment money would be used for purposes other than their properties, including paying other investors and buying a Harley Davidson for an employee.
Hawkins was convicted in February 2023.
In addition to his prison sentence, Hawkins was ordered to pay $1,588,048.50 in restitution. Under federal law, Hawkins must serve 85 percent of his prison sentences. Upon his release from prison, Hawkins will be under the supervision of the U.S. Probation Office for three years.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Lesley Allison, Special Agent in Charge, United States Postal Inspection Service; and Justin Malcom Burse, Acting Commissioner, Kentucky Department of Financial Institutions, jointly announced the sentencing.
The investigation was conducted by the United States Postal Inspection Service and Kentucky Department of Financial Institutions. The United States was represented in the case by Assistant U.S. Attorneys Andrea Mattingly-Williams and Will Moynahan.
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