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Ex-investment advisor pleads guilty to role in $9.5 million Ponzi scheme

On Behalf of | Jan 11, 2022 | Financial Advisor Misconduct

A former investment advisor from Ohio has pleaded guilty to being involved in a Ponzi scheme that defrauded clients out of approximately $9.3 million, FinancialAdvisor reports.

47-year-old Tara M. Brunst entered her plea last week in federal court. She was originally indicted in September 2020 along with co-defendants Raymond Erker and Kevin Krantz for the scheme that began in 2013. Brunst worked as a licensed investment advisor for Erker at his company, Sageguard Wealth Management.

According to court documents, Erker ran a Ponzi scheme in which clients were sold investments in two limited liability companies that were misrepresented as annuities and senior secured notes that had no risk of loss and a guaranteed rate of return. But rather than being put into such investments, the investors’ funds were diverted into Erker’s own bank account and were also used to pay previous investors.

Brunst was charged with soliciting at least 10 people to invest $1.2 million in the two companies. Prosecutors said the defendants set up office fronts in Delaware and Nevada and created false accounts for investors. They also did not tell investors they had ownership interests in companies that were receiving investments from the scheme.

After originally pleading not guilty, Brunst pleaded guilty to conspiracy to commit mail and wire fraud, mail fraud, and three counts of wire fraud. She could receive a maximum sentence of 20 years on each count when she is sentenced in May.

The securities law attorneys at Lewitas Hyman are uniquely qualified to represent individual investors in investment-related claims against financial professionals and their firms. We understand the financial and emotional ramifications of investment losses caused by financial professionals. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact us at (888) 655 6002 or through our online contact form for a free consultation.