AUSTIN (KXAN) — Texas Securities Commissioner Travis J. Iles announced Friday an Austin resident has been sentenced to serve 40 years in prison after he was convicted of first-degree securities fraud. Tommie “Tom” Carter Jr., 64, is also required to pay more than $830,000 in restitution to victims.

The Texas State Securities Board’s investigation found Carter raised more than $1 million from 20 victims, promising them he’d use their principal “to buy and sell real property and distressed business equipment,” per the Texas State Securities Board release. The investigation found Carter’s business projects weren’t creating enough revenue to cover his monthly business expenses, and the new investor money he was collecting was used to pay off debts to earlier investors.

Prior to the conviction, Iles entered a Cease and Desist Order to end Carter’s illegal sales of securities. After the investigation, Bexar County Criminal District Attorney Joe Gonzales named TSSB Assistant Director Angela Cole to prosecute the case, and Carter was indicted in Bexar County’s 175th Judicial District Court.

“Investment scammers prey on trust. They often falsely tout integrity, promote safety, and promise security to obtain and misuse the hard-earned money of our fellow Texans,” Iles said in the release. “My office will continue its good work to uncover their schemes and pursue justice for their victims.”

Carter’s co-defendant Derrick R. Trussell was charged with securities fraud and other crimes, and entered a plea of no contest to securities fraud in October 2021. Trussell will serve deferred adjudication community supervision over a five-year term and will pay nearly $17,000 in upfront restitution.

As part of his plea bargain, Trussell agreed to enter a cease and desist order which finds “that Trussell illegally and fraudulently offered securities in Texas and bars further violations,” per the TSSB release.