Advisor Accused of Taking $1.6M Faces Wire Fraud Charge
Prosecutors allege that the wealth manager misappropriated client funds, using them for her real estate business.
A financial advisor based in Edina, Minnesota, faces a felony wire fraud charge after allegedly misappropriating $1.6 million in client funds and using the money to buy properties for her real estate business, U.S. prosecutors in Minnesota announced.
Kristi Margaret Berge, 47, who acted as an investment advisor in Minnesota, founded and was CEO of Keep Safe Investments LLC, or KSI Financial, a financial planning and investment services firm, according to court records.
Berge also co-owned and operated J&K Connect LLC, a company that invested in real estate through buying, renovating and reselling properties.
While the Justice Department press release posted Friday describes her as a registered investment advisor with the Financial Industry Regulatory Authority, FINRA’s BrokerCheck lists her as a previously registered investment advisor. The Securities and Exchange Commission website lists her KSI registration as stretching from July 11, 2013 until Dec. 31, 2023.
KSI’s Minnesota registration status was revoked Feb. 13, according to SEC records.
From June 2020 through February 2023, authorities allege, Berge fraudulently misappropriated about $1.6 million from some of her clients’ accounts by falsely representing to the clients that she would maintain their money in safe and secure investment accounts, such as individual retirement accounts and 401(k) retirement savings plans, according to the Justice Department.
Instead, Berge misappropriated the money by repeatedly withdrawing client funds in varying amounts between $5,000 and $220,000 and depositing the money into bank accounts she controlled. Berge used the clients’ funds to purchase multiple properties in Edina for her real estate business, prosecutors allege.
Berge tried to conceal her fraud by falsely labeling the illicit withdrawals as “management” or “administrative” fees and by creating fabricated records to give the impression that she had authorization to withdraw clients’ investment funds, prosecutors allege.
Berge is charged with one count of wire fraud. On March 7, she is scheduled to make her initial appearance in U.S. District Court before Judge Eric C. Tostrud. The case resulted from an FBI investigation.
Berge’s attorney declined to comment on the allegations when contacted by ThinkAdvisor on Monday.
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