Former Westlake Investment Advisor Sentenced to Nearly 22 Years in Prison for Operating Ponzi Scheme
U.S. Attorney Bridget M. Brennan announced that Tara M. Brunst, 47, of Olmsted Falls, Ohio, pleaded guilty in federal court today to participating in an investment fraud scheme that stole approximately $9.3 million from clients. Brunst pleaded guilty to conspiracy to commit mail and wire fraud, mail fraud and three counts of wire fraud.
According to court documents, Brunst was employed as a licensed investment advisor for co-defendant Raymond A. Erker in Westlake, Ohio. Beginning in January of 2013 and continuing through January of 2018, court records state that Brunst and the alleged co-conspirators engaged in a conspiracy that devised a scheme that stole approximately $9,366,976.37 from investors.
As part of the scheme, members of the conspiracy sold investments to clients that they misrepresented as annuities and senior secured notes with no risk of loss and with a guaranteed rate of return. Without the approval or consent of investors, investor funds were diverted to other entities they controlled and personal bank accounts.
Court records state that to keep up with promised rates of return, Brunst and the alleged co-conspirators falsely represented that payments to previous investors were rates of return and interest when the payments were actually new investor funds, the trademark of a Ponzi scheme.
Additionally, Brunst and the alleged co-conspirators failed to disclose to investors that they had substantial or limited ownership interests in companies receiving investments from the scheme.
To avoid detection, members of the conspiracy set up office fronts in Delaware and Nevada, contracted with call centers and created false websites and account statements that purported to show investor account balances.
Additionally, charged in this matter are Raymond A. Erker, 50, of Avon, and Kevin Krantz, 56, of Olmsted Falls. These two individual cases remain ongoing.
This investigation was conducted by the Ohio Department of Commerce Division of Securities, the United States Postal Inspection Service and the Westlake Police Department. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough and Kathryn Andrachik.