Michael Drilling of Grand Marais pleaded guilty in federal court on April 17 to one count of securities fraud. The 47-year-old investment adviser was charged with defrauding 13 investors of nearly $6 million.
Drilling was a seasonal employee at Voyageur Canoe Outfitters the summers of 2012 and 2013 and lived at the Tip-of-the-Trail property he purchased at a county auction in June of last year.
Assistant U.S. Attorney Timothy Rank told WTIP that Drilling admitted to creating a scheme to defraud his investment advisory clients through his company, Financial Advisory Partners LLC. Drilling defrauded clients by stealing over $5.6 million of their investment funds between January 2010 and November 2013.
While the names of the defrauded investors are not public information, the plea agreement does state one such investor was from Minnesota. The rest apparently were located throughout the country.
Prior to establishing his own investment firm in May 2009, Drilling had worked in the field since 1995. The Star Tribune reports defense attorney Allan Caplan said Drilling, formerly of Prior Lake, spent the money on himself and lost it in investments and at casinos. Rank said some of Drilling's victims lost their life savings.
According to the plea agreement, Drilling agreed to forfeit all real and personal property derived from proceeds traceable to the frauds. This could include a property in Sedona, Arizona as well as the Tip-of-the-Trail property.
Sentencing will likely take place this summer after a full investigation. Drilling faces a maximum sentence of five years in prison, supervised release and up to $150,000 and restitution.