Instructions: Read the article. There's 3 pages.

Be sure to read all three (the pages

aren't very long). After you've read it, write a brief reflection (1-2 paragraphs, 8-12
sentences total) summarizing the article and identifying 3 things you can do to protect
yourself from fraud. You have the option of handwriting your reflection or typing it up. If
you decide to type it in Microsoft Word or Google Docs, share the document with me on
Google Drive in the Finance folder I created/shared with you.

Defrauded by a friend: Army Lt.,

neighbor say they were scammed
out of thousands
During his first tour of duty in Iraq, U.S. Army Lt. Ariel Castillo saved up $25,000 including a
$15,000 bonus for re-enlisting while overseas.

Soon after returning home to Lawrence in 2007, he decided to invest that money with a local
financial planner recommended by his sister, who had attended law school with him.
But Castillo said it wasnt until five years later after returning from a second tour of duty in
Iraq that he discovered his money was never invested the way Robert Burton had promised.
Burton, 35, owner of Pinnacle Financial Consulting LLC of Lawrence, told Castillo that his
money would be placed in an IRA account with a diversified portfolio of publicly traded
securities. A year ago, after losing confidence in the way Burton was managing his investments,
Castillo asked him to return all of his funds. He has never gotten any of his money back.
He didnt just manage my money, he was a friend. He was a friend of my wife, my sister, and
he was a guest at my wedding, said Castillo, 31, who is now a chaplain at a Veterans
Administration hospital in New York City. Rob is a parasite to the entire Commonwealth. What
he did in Lawrence he will do elsewhere if he is not stopped.

State Attorney General Martha Coakleys Office has filed a lawsuit against Burton and his firm
Pinnacle Financial, alleging numerous illegal acts and misappropriation of clients funds. Castillo
is just one of the victims in the lawsuit.

Burton runs his business from the second floor of a century-old three-story brick office building
at 170 Common St. overlooking Campagnone Common, located next to Lawrence Superior
Court and several doors down from Lawrence City Hall. From there, the Attorney Generals
office alleged that Pinnacle Financial has been engaging in unfair or deceptive acts and
practices in connection with their charging of advance fees and providing dozens of
Massachusetts consumers purported mortgage loan modification services, bankruptcy petition
preparation services, and financial and investment advice.

The Eagle-Tribune attempted to get comment from Burton for this story, but telephone and
hand-delivered messages left at Pinnacle Financials office were not returned.

The primary focus of the lawsuit filed by Coakleys Office is that Pinnacle and Burton allegedly
exploited the foreclosure crisis to prey upon homeowners facing financial troubles and the loss
of their home particularly minority and non-native English speakers. The company unlawfully
solicited advance fees for foreclosure-related services and also provided legal advice without a
license while misrepresenting the services they provide, according to the attorney generals
office.

But many of Pinnacles victims are people like Castillo clients who werent struggling
financially and entrusted the company to invest money for them, promising great returns in a
short period of time, the lawsuit noted.
After receiving consumers investment funds, however, (Pinnacle and Burton) fail to invest the
monies as promised, and instead use the funds for their own benefit. Even after repeated
demands, (Pinnacle and Burton) fail and refuse to return the funds to consumers, Assistant
Attorney General Justin Lowe alleged in his complaint.

Thats exactly what Castillo said happened to him. Initially, Burton told him that he would open
an IRA account and invest his savings in index funds and a diversified equities portfolio. During
2008, he said Burton told him he was putting all of his $25,000 in cash reserve because of the
stock market crash.

The economy had recovered by late 2011 when Castillo had returned from his second Iraq
deployment, and he believed Burton would manage his investments wisely.

On Nov. 29, 2011, Castillo logged into Pinnacle Financials client computer website to check his
investments, only to learn that his assumption was wrong: His account balance had decreased
from $27,000 to about $18,000, and those funds were still in cash reserves.

I began to lose confidence in Burtons competency when he could not provide a reasonable
explanation for why my money had remained in cash reserves since 2008 when the market had
rebounded significantly over the past several years, Castillo said in a signed affidavit in
February thats included in the court records of the lawsuit against Pinnacle and Burton.

At first, Burton stated that the market was not safe and that I should seek out other investment
alternatives such as gold or foreign markets. However, Burton provided no explanation for why
he had not done anything with my money since 2008. At that point, I decided to withdraw all of
my money from under Burtons management and invest it on my own through the Army, he
said.

Castillo said he suspected that Burton had defrauded me when he would not return my money.
He said he asked Burton to transfer all of his funds into an Army Thrift Savings Plan account, a
U.S. government-sponsored retirement savings and investment plan similar to a 401(k) account.
Even after he had arranged for a conference call between Burton and an Army Thrift Savings
Plan customer service agent, Burton still didnt make the transfer and made excuses for the
delay, according to court records.

Burton later offered to send him a check for $10,000, claiming thats what would be left after
taxes. But this would be a transaction where Castillos investment would be rolled over into a
new account without the federal government taxing it.

I could not understand why Burton would be withholding $8,000 in taxes when I had given him
$25,000 in after-tax money in 2007, Castillo said.

But Castillo said Burton never sent him any money back Not a dime.

He was my friend, but I got the feeling he befriended me only to take my money, Castillo, now
a 12-year Army veteran. If he was capable of misleading and stealing from someone he knew
closely, I do not want to imagine what he is capable of doing to a stranger.

An Attleboro resident who once had Burton as his next-door neighbor said he was befriended by
Pinnacle Financials chief executive officer, too, and said it cost him about $34,500 for
misplacing his trust in somebody who later misappropriated a $40,000 investment.
Burton promised to double his neighbors money in just 30 days, according to court documents.
To the neighbor, Burton appeared very successful.

His home is new and large, and he drives two late model Mercedes Benz vehicles, including a
2008 S550 and a 2009 ML350, the neighbor wrote in an affidavit last month. Because I
considered Burton a good friend of mine, and because I trusted that he would make good on his
promises to me, I agreed to participate in the July 30, 2012 investment opportunity.
The neighbor said he gave Burton a check for $40,000 half of it was his money; the other half
was invested by his 71-year-old mother.

The 30 days passed, and the neighbor never received the $80,000 he was expecting. Last
September, Burton told him he had mailed out two $40,000 checks, but added the neighbor
could pick up replacement checks at Pinnacle Financial if the neighbor didnt want to wait for
the mail.

Both checks were returned, marked insufficient funds. But Burton still insisted the funds were
in the companys account.

Eventually, all the neighbor received was $5,500.

Aside from numerous excuses and false assurances, Burton has not provided any explanation
for what happened to my money, the neighbor said.

In its lawsuit, the Attorney Generals Office said Pinnacle Financial worked in tandem with two
defunct entities Pinnacle Strategic Investments, LLC and the Pinnacle Asset and Capital
Management Group, LLC.

Defendants intermingled the assets of all such entities, including depositing funds payable to
one entity into the bank accounts of another entity, and issuing checks from one entity to cover
the obligations of another entity, Assistant Attorney General Lowe wrote.

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