Financial planner Rhonda Breard, whose company Breard & Associates Wealth Management is based in Kirkland, was charged Wednesday with mail fraud in connection with a scheme to defraud dozens of clients out of millions of dollars.
She was taken into custody Wednesday morning by the FBI and stood before a U.S. magistrate judge at U.S. District Court in Seattle later that afternoon.
“Investigators are still determining the extent of the fraud,” said U.S. Attorney Jenny Durkan’s office in a release on its “Web site”. “We are aggressively trying to learn information about her clients and assets.”
The charge carries a sentence of up to 20 years in prison and a fine of up to $1 million.
The case is being prosecuted by Assistant U.S. Attorney Carl Blackstone and Matthew Diggs and they charge that Breard took the money from clients, telling them it would be invested in financial holdings and insurance, then taking the money for herself.
Prosecutors asked that Breard’s assets be frozen. The federal judge released Breard on bond and her own recognizance but with many conditions, including an order to not make any financial transactions over $500. Her next court date is scheduled for March 30.
Breard left the courthouse, following the hearing, with a crush of media in toe but refused to answer any questions. She was dressed in a blue jacket, white shirt, black pants, with no makeup and looking dejected. It was a stark contrast to the energetic commercials that she ran on local TV stations to entice investors.
Breard’s attorney, former federal prosecutor Ronald Friedman, said she is cooperating fully with authorities.
“The criminal complaint details how victims in this case trusted Breard with their money after hearing her speak in investment classes at locations such as community colleges,” said prosecutors. “Some had invested with Breard for more than 20 years.”
State financial regulators have said that more than 25 investors might have lost upwards of $8 million.
This action is the second case filed against Breard this week, as James and Shelley Heath of Renton filed a civil lawsuit against Breard, associate Colleen Brown and the Dutch-based investment company ING Financial Partners, claiming that money they invested with Breard & Associates Wealth Management is missing. They have charged that ING was partly responsible for not watching Breard close enough, an accusation the company denies and intends to fight in court. ING blew the whistle on Breard after finding suspicious documents in her office during an audit.
Breard disappeared on Feb. 10, the day that her Kirkland office, located at 4040 Lake Washington Blvd., was shuttered after she lost her broker agreement with ING and the ability to act as a broker in nine states: Washington, Oregon, Michigan, Nevada, New Mexico, Arizona, North Carolina, West Virginia and Wyoming. Two separate sources confirmed that Breard attempted suicide twice on Feb. 10.
She attempted to sell a “huge” amount of jewelry on February 27 to Elegante Jewelry in Bellevue, who’s owner refused after learning of her identity. Breard owns three homes in the area that total $5 million in value along with many luxury vehicles.
Her company’s Web site has the message “under construction” and Beard’s Facebook page has been removed.
Breard has a checkered past with her business dealings including fines totaling $95,000. She was forced to quit Smith Barney and her license was suspended for unauthorized trading.
This case, while on a much smaller scale, is reminding many people of the multi-billion dollar Ponzi Scheme perpetrated by New York investor Bernard Madoff.
The Washington State Department of Financial Institutions, the Washington State Office of the Insurance Commissioner, and the FBI continue to investigate the fraud.
Anyone who invested with Breard and Associates is asked to contact the FBI at 206-622-0460.
