Carlton P. Cabot Jailed 10 Years for $17M Elder Investor Scam

Carlton P. Cabot, the 54-year-old former owner and CEO of Cabot Investment Properties LLC, was sentenced to 10 years in federal prison for orchestrating a $17 million securities fraud scheme that gutted hundreds of elderly investors. The sentence, handed down today in Manhattan federal court by U.S. District Judge Jesse M. Furman, marks the end of a decade-long scam targeting retirees who trusted Cabot with their life savings.

Cabot, of Stamford, Connecticut, pleaded guilty on May 31, 2016, to one count of securities fraud. From 2003 through 2012, his firm sponsored 18 tenants-in-common (TIC) real estate investment offerings sold nationwide. Promised steady rental income, investors—many in their 70s and 80s—believed they were funding secure commercial properties. Instead, Cabot siphoned off millions before expenses were paid, diverting funds into accounts he controlled.

According to court records and Cabot’s own admissions, he repeatedly pulled money from TIC Investment bank accounts into Cabot Investment Properties’ operating accounts, bypassing contractual obligations to pay operating costs and investor disbursements. Those stolen funds were used to cover shortfalls in failing investments, pay for luxury cars, private school tuition, rental apartments, and even a $1,125,651 civil settlement with prior defrauded investors—all without authorization.

To hide the theft, Cabot and co-defendant Timothy J. Kroll, CIP’s chief operating officer, fabricated financial reports that falsely claimed the investments were solvent. These misleading statements concealed the fact that CIP owed the TIC Investments approximately $17 million—money that has never been repaid. By 2012, when CIP collapsed, the damage was irreversible for hundreds left financially ruined.

“Carlton Cabot took $17 million from vulnerable investors and spent it lavishly on himself, and then lied to cover it up,” said U.S. Attorney Preet Bharara. “The victims, many of whom were in their 70s and 80s, were simply looking for a steady income stream to sustain them in their retirement. Now, instead of economic safety and security, they are faced with financial ruin.”

In addition to his 10-year prison term, Cabot was sentenced to three years of supervised release and ordered to pay full restitution. The case was prosecuted by the U.S. Attorney’s Office for the Southern District of New York, underscoring the federal crackdown on white-collar exploitation of the elderly through fraudulent real estate schemes.