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Merrimack Valley

March 24, 2013

Defrauded by a friend: Army Lt., neighbor say they were scammed out of thousands

State Attorney General's office has filed suit against owner of Pinnacle Financial

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

The primary focus of the lawsuit filed by Coakley’s 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 general’s office.

But many of Pinnacle’s victims are people like Castillo — clients who weren’t 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.

That’s 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 Financial’s 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.

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