$7.8 Million Coin Scheme Among New Charges Hitting Braintree CEO

A series of new charges were filed late last week against Arnett L. Waters, the founder of a Braintree financial firm, including the allegation that he bilked customers out of as much as $7.8 million by inflating the cost of coins he sold.

The U.S. District Attorney in Boston filed 16 counts of securities fraud, mail fraud, money laundering, and obstruction of justice on behalf of the Securities and Exchange Commission on Oct. 17.

This follows the announcement of the fraud case against Waters earlier this year, and his alleged violation of a court order freezing all related assets. The SEC reported the following on its website last week:

"According to the criminal information, from at least 2007 through 2012, Waters used fictitious investment-related partnerships to draw in investors, misappropriate their investment money, and spend the vast majority of it on personal and business expenses and debts. Waters is alleged to have raised at least $839,000 from at least thirteen investors, including $500,000 from his church in March 2012.

"The criminal information also alleges that Waters engaged in a criminal scheme to defraud clients of his rare coins business using interstate commerce and the mails. Under this scheme, Waters defrauded coin customers out of as much as $7.8 million by selling coins at prices inflated, on average, by 600% and by inducing coin purchasers to return coins to him, on the false representation that he would sell those coins on the customers’ behalf, when, in fact, he sold most or all of the coins and kept the proceeds for himself. The criminal information further alleges that Waters engaged in money laundering through two transactions totaling $77,000."

Waters also allegedly ignored all or part of a freeze order issued by a federal judge on May 3, 2012 by not telling the SEC about an account held at the Blue Hills Bank containing at least $1,000 and controlled at various times by himself and his wife Janet T. Waters.

After May 3, Waters used funds in that account, also a violation of the court order, according to the filing.

Both Waters, 62, and his wife, 55, are residents of Milton. Also charged with contempt were A.L. Waters Capital LLC, Moneta Management LLC and Port Huron Partners LLP, corporate entities allegedly involved in the fraud case filed earlier this year.

Both the website for A.L. Waters Capital LLC and its phone system have been turned off. Previously reached for comment, Waters referred all questions to his attorney, who has not responded to an inquiry.