An investment adviser with ties to two well-known Maine financial firms is facing felony charges in Illinois that he defrauded clients of more than $1 million while running his own investment firm in Chicago.

Philip E. Moriarty II, who has homes in Northeast Harbor and Scarborough, according to court records, is accused of six counts of wire fraud related to allegations that he defrauded investors of at least $1.1 million while he was the CEO of First Street Capital Partners in Chicago from 2008 to 2010 and an owner of Teton Acadia Capital Partners, which operated sporting goods stores in Jackson, Wyoming. He’s accused of misleading four investors to believe they were investing in his businesses through the use of fraudulent documentation, and then spending the funds on personal expenses, including payments in late 2011 of $39,100 to a golf, hunting and fishing club, and $23,000 to a boarding school in New Hampshire.

A grand jury in Chicago indicted him on the charges on Jan. 27. After a warrant was issued for his arrest, Moriarty was arrested while driving down Route 1 in Scarborough on Feb. 2. He was released on $25,000 bail.

Moriarty did not return phone calls and emails seeking comment on the charges. However, his attorney, William Ziegelmueller, expressed surprise that criminal charges were being brought against his client instead of a civil lawsuit.

“Mr. Moriarty vigorously denies defrauding anybody and will fight these charges through trial,” said Ziegelmueller, a partner at the Chicago law firm of Stetler, Duffy & Rotert.

After his time in Chicago and a short stint in New York, Moriarty began working in Portland in the summer of 2013.

According to his work history, which is available through the Financial Industry Regulatory Authority, or FINRA, Moriarty was affiliated with Black Point Capital Management, the Portland-based investment advisory firm that manages money on behalf of Sprague family members and other wealthy clients, and a subsidiary of Cate Street Capital, the private equity firm that had owned and operated the Great Northern Paper mill in East Millinocket before filing for bankruptcy in early 2014.

Seth Sprague, CEO of Black Point Capital Management, confirmed Monday that Moriarty had worked for his firm, joining in July 2013 and leaving in October 2014. He said Moriarty worked in “business development” and had no access to client accounts.


Sprague would not comment on the specifics of Moriarty’s departure from the firm, but said it happened before anyone knew anything about the investigation in Chicago. His departure in October 2014 came three months before the Chicago grand jury issued its indictment.

“His departure had nothing to do with what we didn’t know about in Chicago and had nothing to do with our clients,” Sprague said Monday. “He was just in business development and it didn’t work out.”

According to Moriarty’s FINRA records, he was “discharged” from Black Point Capital Management for “failure to meet established performance goals.”

Sprague said he did the normal due diligence when vetting Moriarty, including checking references and confirming his employment history.

“I did the normal things you do and none of this other stuff showed up anywhere,” Sprague said.

Sprague stressed that Moriarty’s employment did not put any Black Point clients at risk.

“Moriarty had no responsibility for or access to or involvement with Black Point Capital Management clients or their accounts and he was not in a position to defraud or put at risk any of our clients,” Sprague said.

While employed by Black Point Capital Management, Moriarty was also registered as a broker and “independent contractor” with Portland-based Cate Street Securities LLC from April 2014 to January 2015, according to his FINRA records.

Alexandra Ritchie, a spokeswoman for Cate Street Securities, confirmed Monday that Moriarty was associated with her firm during that period, but said he was not an employee.

“Cate Street Securities conducted a full background check prior to engaging with Mr. Moriarty in accordance with FINRA standards, and this background check did not result in any issues or discrepancies being discovered,” Ritchie wrote in an email. “Mr. Moriarty has not been associated with Cate Street Securities since January 2015 and we are not able to comment further on the matter.”

How Moriarty could have been an employee at Black Point while also a contractor for Cate Street points to how licensing works in the investment industry. Black Point Capital Management is a registered investment adviser, but the investment industry licenses Moriarty held were required to be parked at a registered broker/dealer. Cate Street Securities is a registered broker/dealer.


Judith Shaw, administrator of Maine’s Office of Securities, said Moriarty was also licensed through her office to work as an investment adviser in Maine. She would not comment on whether her office had been approached by investigators in Illinois. She said her office would continue to monitor Moriarty’s case in Chicago, which is just beginning the discovery phase. A status hearing is scheduled for March 18.

Even while in Chicago, it’s clear Moriarty had ties to Maine, and especially the Mount Desert Island community. He is listed, along with his wife Anita, as a past donor going back to at least 2011 to several local organizations, including the Friends of Acadia, the College of the Atlantic in Bar Harbor, and Northeast Harbor Library.

This is not his first brush with the law. Moriarty was pulled over in Mount Desert on Nov. 17, 2013, and charged with speeding and driving under the influence, for which he had his license suspended for 120 days and was fined, according to Hancock County court records republished by the Ellsworth American.