Amish advisor hoodwinks 2,600 investors

The Securities and Exchange Commission has charged a 77-year-old Amish financial advisor for defrauding 2,600 mostly Amish investors. The Ohio advisor raised $33 million from the investors, promising them he’d purchase risk-free government securities. Instead, he made high-risk investments, sustained losses and then provided account statements showing fabricated gains. In the end, he lost $15 million in client assets from multiple generations of Amish families. The advisor filed for bankruptcy in June 2010.

A California financial advisor was arrested for felony theft from a senior citizen. According to authorities, the advisor convinced an elderly victim to obtain a reverse mortgage in order to fund home repairs. A year later, he convinced the victim to give him $25,000 for an investment he promised would pay a 10 percent return in six months. The advisor never returned the $25,000 or paid the 10 percent interest. The advisor then convinced the client to buy a life insurance policy with a $60,000 premium. After the policy was issued, the client requested a $15,000 hardship withdrawal. The advisor instead requested a $20,000 withdrawal. When the check arrived, the consumer notified him of the extra amount. The advisor asked her to send the difference in a check made out to him. He then sent the insurance company a $5,000 check, which bounced. Finally, the advisor borrowed $7,000 from the client but failed to repay $2,500. In all, the advisor defrauded the elderly client of $32,500.