Investment Adviser Gets 2-Year Prison Sentence in Fraud Case

A Lake Forest investment adviser who pleaded guilty in federal court three months ago to defrauding investors of nearly $1.8 million has been sent to prison for two years and ordered to pay restitution.

Randall C. Hutchens, 40, also was sentenced by a federal judge to three years’ probation following his release from prison.

From 1990 to 1992, Hutchens used his company, Laguna Equities Inc., to sell 61 investors securities that were supposedly issued by two insurance companies and backed by U.S. Treasury notes. Those securities, however, did not exist.

The investors came mainly from Church of Christ congregations, because part of the yield on the 9.3% interest rate on the notes was supposed to go to church-related activities, Assistant U.S. Atty. Stanley L. Friedman said.

Hutchens previously settled a civil lawsuit filed by the Securities and Exchange Commission and agreed to repay investors. The SEC seized his assets to make partial refunds.

Late Monday, U.S. District Judge William J. Rea ordered Hutchens, as part of his sentence, to refund as restitution the remaining $549,364 owed.