Wealthy Scottsdale broker begins 15-year prison sentence for $20 million fraud scheme

Court documents show David Alcorn’s involvement as knowingly selling fraudulent investments and licenses to investors — most nearing retirement age.
Published: Sep. 6, 2022 at 9:05 PM MST
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SCOTTSDALE, AZ (3TV/CBS 5) - A 15-year prison sentence begins today for wealthy Scottsdale broker David Alcorn, convicted of fraud and money laundering in a nationwide scheme involving fraudulent investments. The Department of Justice said those targeted in the conspiracy: the elderly.

But several notable Phoenix-area leaders and businessmen, including the former Phoenix mayor, wrote to the judge to be lenient on Alcorn for sentencing because many claim he’s taking the fall for something he didn’t know was illegal. “I’ve met some people that are shady or whatever, but I never sensed that all from David and I still don’t believe it today even after the conviction and sentence, which is substantial,” said Thomas Littler, a colleague of Alcorn’s.

Littler served as Alcorn’s attorney for previous business matters, including a bankruptcy case. “I found him to be a decent individual who truly believed everything he was doing,” Littler said. But a judge and jury found otherwise in this most recent criminal case.

According to court documents and the Department of Justice, Alcorn was one of several people part of an illegal investment scheme from 2011 to 2017. The documents show Alcorn’s involvement as knowingly selling fraudulent investments and licenses to investors — most nearing retirement age. “He truly believed that it was a reasonable investment for people to make,” Littler said.

But the Department of Justice said Alcorn and his conspirators swindled much of the investors’ cash to pay for their scheme and lavish lifestyles. The feds said many investors cashed out 401ks and other retirement accounts to invest without knowing Alcorn and his conspirators were transferring up to 70% of those funds to their own companies.

Littler said while Alcorn dealt with the license applications, he believes other men involved in the scheme, who he said had a history of fraud, were to blame. “He was raising money in a fraudulent way apparently, but I never believed David knew that in all my conversations with David. I don’t believe he was involved in that part of the business,” Littler said.

Not only does the 78-year-old’s sentence begin Tuesday, but he and his other conspirators now owe their victims more than $20 million in restitution. The Department of Justice said combatting elder abuse and financial fraud targeted at seniors is a key priority of their department.

Arizona’s Family spoke to some of Alcorn’s family on the phone Tuesday, who said this is all very raw and fresh, so they didn’t want to do an interview right now.

The other conspirators in the case are serving sentences between five and 35 years, and one is still awaiting sentencing later this month.