Accused 'faith-based' con man pleads not guilty to fraud

Accused 'faith-based' con man pleads not guilty to fraud »Play Video
After eluding police for more than a year, the man accused of defrauding local church members by posing as a financial advisor finally came forward in court on Wednesday.

More than a year after failing to appear, Stone Phillips III was present in court to enter a 'not guilty' plea to first-degree theft after finally being arrested on a felony warrant in San Diego last month.

KOMO 4 first exposed the fraud more than two years ago and the report prompted alerts around the country.

Until seven years ago, his name was Ricardo Martinez Phillips III. But state documents show he has used more than a dozen different names.

Phillips claimed to be a sought-after financial advisor, attending prominent churches in Seattle, Tacoma and Sea-Tac, and befriending dozens of people.

He gave workshops at local churches to entice investors into his company, Northwest Financial Solutions.

Church members told KOMO 4 News they trusted him enough to rollover as much as $1 million in retirement saving and let him invest them. Some unknowingly even signed over their homes.

Laurie Balthis of Grays Harbor County says she lost more than $40,000. Kojo Aako lost more than $5,000, and Cynthia Johnson-Colston lost her entire retirement savings.

"We're talking about $116,000," Colston told us in January 2005. Because the investments turned out to be unregistered, and the rollover application was a suspected fraud, Cynthia also faced tax penalties from the IRS.

KOMO News obtained video of Phillips at Mt. Zion Baptist Church in Seattle in late 2002. In it, he presents a lengthy, almost eye-glazing recap of the historical evolution of the Federal Reserve System. He offers himself as someone able to help them with loans and investment advice in the future.

Consumers and local pastors confirm Phillips also preyed on the faithful at St. John Baptist Church in Tacoma, Bethlehem Baptist in Tacoma, and Christian Faith Center in SeaTac.

During our four-month investigation, we linked Phillips to multiple Social Security numbers, more than a dozen different names, a driver's license from Missouri, and phone numbers and addresses in Missouri, Washington, California, Georgia and Arizona.

Despite complaints to state regulators, the attorney general and even the local police, Phillips remained free to move south, first to Vancouver then to Arizona.

The complaint that finally got him arrested came from federal officials, who claim Phillips defrauded the King County Housing Authority of more than $8,000 by contracting as a landlord for subsidized housing. Officials say he then illegally collected benefits by living in the house he was supposed to be renting out.

The state Department of Financial Services still has an open case for securities fraud. The Pierce County prosecutor is now reviewing the case to see whether other charges can be filed.

Phillips is due back in court on March 28.