A U.S. Attorney Wednesday charged David McFadden, a former Securities America, Inc. broker, with committing a felony by allegedly conspiring to defraud elderly investors out of their retirement money.

According to a court filing from the U.S. Attorney for the Eastern District of Louisiana, McFadden "put himself in the position to sell high-commission variable annuities and mutual funds to clients, made material misrepresentations and omissions related to his qualifications, the diversification of stocks, and the investment returns he would achieve." The alleged conspiracy began sometime before January 1999 and continued to September 2006, according to the court filing.

A representative for the U.S. Attorney said, if convicted, McFadden faces up to five years in prison and a $250,000 fine.

McFadden's lawyer didn't return calls seeking comment.

In September 2006, Securities America, a unit of Ameriprise Financial Inc. (AMP), settled charges with the NASD, the predecessor of the Financial Industry Regulatory Authority, by agreeing to pay a $2.5 million fine for failing to adequately supervise McFadden, and $13.8 million in restitution to Exxon retirees who were McFadden's clients. McFadden agreed to give up his securities license late in 2006.

According to the U.S. Attorney's bill of information charging McFadden, McFadden told clients he was a certified public accountant, even though he had not been a licensed CPA since 1987.

"McFadden did not provide a complete and balanced description of his expertise despite knowing that his clients did not have detailed experience in the buying and selling of stocks, other than reviewing their 401(k) monthly statements, and would rely upon his representations regarding his CPA experience and expertise," according to the court filing. The filing alleged McFadden put clients in undiversified, volatile investments while telling them they were diversified, and overstated how much they could safely withdraw from retirement accounts.

-By Jessica Papini, Dow Jones Newswires; 201-938-2437; jessica.papini@dowjones.com