Feds: Kirkland investment adviser stole millions
SEATTLE - Federal prosecutors say a Kirkland investment adviser stole millions of dollars from at least 20 clients.
Rhonda Breard made an initial appearance in federal court in Seattle on Wednesday afternoon on mail fraud charges.
Prosecutors say Breard, 47, told investors their money would be placed in financial and insurance products, but she instead used it for her own purposes.
In court on Wednesday and afterward, Breard kept her eyes down and her mouth shut. But some of her clients who showed up at the hearing say they want to know where their money is.
Prosecutors say some of the clients had invested with her for 20 years, and some trusted their money with her after hearing her speak about investing at classes at community colleges.
"I am less interestd in what happens to her than in getting my own life and seeing everyone affected by this getting their funds back," said one client, Gordon Overby.
Another client, who identified herself as Belinda, said, "I'm still in shock. It's been over two weeks - I'm still in shock, and I don't know what I'm gonna do 'cause I need my money back."
U.S. Attorney Jenny Durkan says investigators are still trying to determine the extent of the fraud. The state Department of Financial Institutions says as many as 25 investors could be out more than $8 million.
"Investigators are still determining the extent of the fraud," Durkan said in a statement. "We are aggressively trying to learn information about her clients and assets, and we want any assets preserved for victims in this case.
"We will ask the court to impose a condition that Ms. Breard not dispose of any assets while the investigation into the full scope of the fraud continues."
Officials said the alleged fraud was discovered in February when an auditor with ING Financial Partners, the broker Breard used to run her transactions, made an unannounced visit to Breard's office.
According to investigators, the auditor asked to see inside a locked cabinet that Breard said contained her personal tax records.
When the cabinet was opened, investigators said, the auditor found files showing that Breard was not actually making investments with her clients' money.
Instead, federal prosecutors say, she used millions for her own personal use.
A lawsuit filed Tuesday against Breard claims Breard and another partner forged bogus statements to send to clients.
Suzanne Farason, chief of enforcement for the securities division of the Washington State Department of Financial Institutions, said most of the victims invested in what they thought were mutual funds or annuity products.
"Sometimes they had cashed out another annuity at Rhonda Breard's direction," Farason said. "(Breard) said they would get a better deal."
Farason said many of the victims met Breard through financial seminars held throughout the area.
In court on Wednesday, Magistrate Judge James P. Donohue allowed Breard to be released on her own recognizance, saying she is not a flight risk.
He barred Breard from selling her assets without approval from the U.S. Attorney's Office and prohibited her from engaging in any financial transaction worth more than $500.
Breard appeared nervous during the hearing and did not look at the crowd in the courtroom. She also refused to answer reporters' questions after the hearing.
Prosecutors are asking anyone who invested with Breard to contact the FBI at 206-622-0460.
Rhonda Breard made an initial appearance in federal court in Seattle on Wednesday afternoon on mail fraud charges.
Prosecutors say Breard, 47, told investors their money would be placed in financial and insurance products, but she instead used it for her own purposes.
In court on Wednesday and afterward, Breard kept her eyes down and her mouth shut. But some of her clients who showed up at the hearing say they want to know where their money is.
Prosecutors say some of the clients had invested with her for 20 years, and some trusted their money with her after hearing her speak about investing at classes at community colleges.
"I am less interestd in what happens to her than in getting my own life and seeing everyone affected by this getting their funds back," said one client, Gordon Overby.
Another client, who identified herself as Belinda, said, "I'm still in shock. It's been over two weeks - I'm still in shock, and I don't know what I'm gonna do 'cause I need my money back."
U.S. Attorney Jenny Durkan says investigators are still trying to determine the extent of the fraud. The state Department of Financial Institutions says as many as 25 investors could be out more than $8 million.
"Investigators are still determining the extent of the fraud," Durkan said in a statement. "We are aggressively trying to learn information about her clients and assets, and we want any assets preserved for victims in this case.
"We will ask the court to impose a condition that Ms. Breard not dispose of any assets while the investigation into the full scope of the fraud continues."
Officials said the alleged fraud was discovered in February when an auditor with ING Financial Partners, the broker Breard used to run her transactions, made an unannounced visit to Breard's office.
According to investigators, the auditor asked to see inside a locked cabinet that Breard said contained her personal tax records.
When the cabinet was opened, investigators said, the auditor found files showing that Breard was not actually making investments with her clients' money.
Instead, federal prosecutors say, she used millions for her own personal use.
A lawsuit filed Tuesday against Breard claims Breard and another partner forged bogus statements to send to clients.
Suzanne Farason, chief of enforcement for the securities division of the Washington State Department of Financial Institutions, said most of the victims invested in what they thought were mutual funds or annuity products.
"Sometimes they had cashed out another annuity at Rhonda Breard's direction," Farason said. "(Breard) said they would get a better deal."
Farason said many of the victims met Breard through financial seminars held throughout the area.
In court on Wednesday, Magistrate Judge James P. Donohue allowed Breard to be released on her own recognizance, saying she is not a flight risk.
He barred Breard from selling her assets without approval from the U.S. Attorney's Office and prohibited her from engaging in any financial transaction worth more than $500.
Breard appeared nervous during the hearing and did not look at the crowd in the courtroom. She also refused to answer reporters' questions after the hearing.
Prosecutors are asking anyone who invested with Breard to contact the FBI at 206-622-0460.