March 8, 2021

Judge Denies Ex-Morgan Stanley Boston Broker’s Bid for Early Prison Release

by Mason Braswell

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A federal judge in Massachusetts on Friday denied a bid by former Morgan Stanley broker and convicted fraudster James Polese for early compassionate release from prison, according to court filings.

Judge Mark L. Wolf, who sentenced Polese, 54, in November 2018 to five years for fraud and identity theft for stealing nearly $450,000 from an octogenarian client, upheld the original term, noting the severity of Polese’s crime.

In issuing his decision, Judge Wolf cited the primary victim, Ralph E. Bates, and the “despicable” nature of the crime, according to legal publication “Law 360.”

“I’ve sentenced, in my almost 36 years as a judge, many people who committed fraud,” Wolf said, according to the publication. “In some there were larger sums of money. But Mr. Polese, you committed one of the most despicable crimes of fraud I have encountered.”

Polese, who is scheduled for release in April 2023, sought an early dismissal on the grounds that he has hypertension and is thus “more susceptible” to contracting Covid-19, according to filings.

He filed for release in court in February after two unsuccessful petitions to the Bureau of Prisons last summer following an emergency directive issued by then-U.S. Attorney General William Barr, according to court documents.

Prosecutors fought the motion, arguing that the FMC Camp facility of the Devens prison where he is being held has not had any instances of Covid since the onset of the pandemic and hypertension did not make Polese substantially more susceptible. Releasing him before he had served even half of his sentence would undermine the deterrent value and seriousness of his crime, they said.

Polese was accused of stealing around $450,000 primarily from Bates and using it for a wind farm project and for paying down credit card debt and college tuition for his children. Bates, who remained a Morgan Stanley customer after the incident, told AdvisorHub at the time of the 2018 sentencing that he was satisfied that justice had been served by the five-year term and the order of $462,000 in restitution.

Polese has repaid $439,000 of the restitution, he said in arguing for early release. The two individual victims have been paid back in full, while the remaining balance of his restitution is due to Morgan Stanley, his lawyers said in filings.

Morgan Stanley won an arbitration award of $841,380 from Polese in June for balances on promissory notes. Another arbitrator in April ordered him to pay the firm $372,000, subject to offset by any amount he agreed to pay to customers in court pleadings.

Morgan Stanley fired Polese and his junior partner, Cornelius Peterson, from its 53 State Street branch in Boston in June 2017. Peterson, 32, was sentenced to 20 months in prison in June 2018 and was released in January, according to the Bureau of Prisons website.

In another case last summer, a federal Judge in Indianapolis denied a separate request for compassionate release by high profile ex-Merrill Lynch broker Thomas J. Buck, who had pleaded guilty to overcharging clients by as much as $2 million. Buck, 67, was sentenced to 40 months and is scheduled for full release in January 2022.

He was transferred to home confinement in July, six months prior to his scheduled release, according to the Bureau of Prisons website and his lawyer, Pat Shoulders, a partner at Ziemer, Stayman, Weitzel & Shoulders, LLP, in Evansville, Indiana.