Sarasota insurance and securities agent arrested for fraud

JOHNSON The Florida Department of Law Enforcement and the Office of Financial Regulation Bureau of Financial Investigations announced the arrest of Scott Leon Johnson, 56, of Sarasota, on charges related to defrauding three elderly clients out of investment funds totaling $182,790. Mr. Johnson was formerly licensed with the state of Florida to sell both investment securities and insurance products through two businesses, Automated Trading Systems and Augusta Financial Corp.

Mr. Johnson was arrested March 4 at his residence by the Sarasota County Sheriff's Office and charged with organized scheme to defraud in an amount in excess of $50,000, a firstdegree felony, and selling unregistered securities, a third-degree felony. Investigators began their investigation after receiving a complaint in April 2008. The investigation revealed that Mr. Johnson committed the fraud through two methods. He offered to act as an investment advisor to the first victim who was also his neighbor. After gaining her trust, rather than having his neighbor make her investment checks payable to a registered insurance or insurance company, Mr. Johnson instructed the victim to make her investment checks totaling $51,500 payable directly to him. He allegedly used these funds for his own purposes.

The investigation also revealed that when Mr. Johnson took possession of victims' funds he would structure or break down their investments into several smaller amounts, which were transferred repeatedly between numerous trading accounts, resulting in a portion of transferred funds being deposited back into his personal checking account. He then used victim funds to pay personal expenses such as his mortgage, car loan and cash payments.

Mr. Johnson was booked into the Sarasota County Jail.