A former financial advisor in Ohio has pleaded guilty for her role in a scheme that fleeced investors out of millions of dollars in a Ponzi scheme.
From January 2013 through January 2018, Tara Brunst, of Olmsted Falls, Ohio, while employed as a licensed investment advisor for co-defendant Raymond Erker in Westlake, Ohio, took part “in a conspiracy that devised a scheme” resulting in around $9.4 million being stolen from investors, according to the U.S. Attorney’s Office for the Northern District of Ohio.
Prosecutors say that Brunst and other co-conspirators peddled purported annuities and senior secured notes with a guaranteed rate of return and no risk of loss and then moved the funds raised from investors to personal bank accounts and to other entities they controlled.
To perpetrate the scheme, the fraud included bogus websites, office fronts in Delaware and Nevada and contracts with call centers, the U.S. Attorney’s Office says.
The scheme also involved payments to previous investors made to appear as rates of return and interest when they were in fact money from new investors, according to the U.S. Attorney’s Office.
Brunst pleaded guilty last week to conspiracy to commit mail and wire fraud, mail fraud and three counts of wire fraud, the U.S. Attorney’s Office says.
Cases remain open against the other individuals named in the matter, including Erker, of Avon, Ohio, and Kevin Krantz, of Olmsted Falls, Ohio, according to the U.S. Attorney’s Office.
Brunst became registered as a broker with PNC Investments in May 2014 but was discharged in June the following year over allegations that she had drafted a bogus letter, at a client’s request, to make it appear that PNC Bank was threatening the client with closing its accounts, failing to inform her manager about sending the letter to the client “and for being dishonest during the investigation” of the matter, according to BrokerCheck.
In August 2015, however, Brunst became registered as an investment advisor with Sageguard Wealth Management, where she remained until October 2019, according to the Securities and Exchange Commission’s Investment Advisor Public Disclosure database.
She never registered with another firm after that, according to her record.
Erker, who joined the financial services industry in 2002 at Merrill Lynch, came to Sageguard in 2012 and stayed with the firm, like Brunst, until October 2019, according to his record on the IAPD database.
He also never again registered with another firm, according to his records.
Krantz has no record with the SEC nor with the Financial Industry Regulatory Authority.
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