United States Attorney Jenny A. Durkan
Western District of Washington
Bellingham Man Arrested For Wire Fraud Involving Theft From Elderly Clients
'Broker’ had been Barred from Financial Advising but Failed to Tell Clients
A long-time tax and financial adviser in Bellingham, Washington was arrested today on a criminal complaint charging him with wire fraud, announced U.S. Attorney Jenny A. Durkan. JEFFREY M. KNUTSEN, 43, owned and operated Bellwether Financial Services dba Bellwether Wealth Management. In July 2005, KNUTSEN was barred by the Financial Industry Regulatory Authority (“FINRA”) from associating with any broker-dealer as a stock broker because of a customer complaint that he had embezzled from his account. Despite being barred, KNUTSON continued to work with clients – many of them elderly – and now is alleged to have stolen more than $250,000 from client accounts.
“The elderly are particularly vulnerable to this type of fraud because some are less familiar with online trading and computer access to accounts,” said U.S. Attorney Jenny A. Durkan. “It is critical that trusted friends or family members assist them in tracking their resources and determining who has access to their accounts, so that they do not fall victim to this type of predatory conduct.”
According to the criminal complaint, after being barred by FINRA, KNUTSEN did not tell his clients that he had been barred, but simply told clients he was moving to a different online brokerage to reduce the fees they would have to pay. He set up online accounts with TD Ameritrade and later E*Trade in his clients’ names and retained full access and control over the accounts, including check-writing privileges. He allegedly told the clients he would charge them a management fee of one percent or less per year to manage their accounts. However, the criminal complaint alleges he embezzled far more than that from customer accounts, taking some $260,000 from as many as 17 victims.
KNUTSEN made his initial appearance in U.S. District Court in Seattle today. Wire fraud is punishable by up to 20 years in prison.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The Financial Industry Regulatory Authority (“FINRA”) has online resources to allow clients to check on their advisor’s disciplinary history here. The BrokerCheck website
is a free tool to help investors research the professional backgrounds of current and former FINRA-registered brokerage firms and brokers, as well as investment adviser firms and representatives.
The case is being investigated by the FBI and Bellingham Police Department.
The case is being prosecuted by Assistant United States Attorneys Steven Masada and Justin Arnold.