Two former Morgan Stanley advisors used clients' money to back a letter of credit (L/C) for a wind farm project.

James Polese and Cornelius Peterson have now pleaded guilty to using client money for personal expenses and unauthorised investments in the wind farm. Polese also pleaded guilty to identity theft.

Wind farm

Prosecutors say the former bank advisors used one client's account in 2014 to make an unauthorised US$100,000 investment in the wind farm project.

The pair subsequently used US$400,000 from another client's account to back an L/C for the project in 2015.

College fees

The former advisors also made an improper US$350,000 investment in real estate in 2016 using client money.

Polese allegedly diverted funds to pay his children's college fees and other expenses according to the prosecution.

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