TRENTON, N.J. – An insurance salesman who was entrusted with managing his client’s inheritance was convicted by a federal jury today for fraudulently using the funds for his own benefit, U.S. Attorney Paul J. Fishman announced.
Patrick McCullagh, 67, of Georgetown, Kentucky, was convicted of an indictment charging him with one count of wire fraud. He was convicted following an eight-day trial before U.S. District Judge Mary L. Cooper in Trenton federal court. The jury deliberated for six hours before returning the guilty verdict.
According to documents filed in this case and the evidence at trial:
McCullagh was the principle of MidAtlantic Regional Services Inc., a purported insurance company located in Bordentown, New Jersey. In 2001, the victim entrusted McCullagh with money that the victim had inherited from his mother after her death. McCullagh falsely told the victim that he would use the funds to invest in a manner that would preserve the principle while paying the victim back in interest.
Instead, McCullagh pocketed some of the funds directly and forged withdrawal requests so he could loot money from the victim’s investment accounts. In order to deceive the victim, McCullagh also had the victim’s account statements diverted from the victim’s address. In addition, the “interest” payments that McCullagh paid the victim on a monthly basis were actually funds McCullagh had siphoned from the investment accounts’ principle balance. McCullagh even fraudulently told the victim that some of the investments were tied-up in legal disputes surrounding a Kentucky property and that he needed money for legal fees, which the victim later provided. Altogether, McCullagh defrauded the victim out of more than $100,000.
The wire fraud charge of which McCullagh was convicted carries a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense. Sentencing is set for July 6, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Molly Lorber and Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: James Patton Esq., Livingston, New Jersey