SEATTLE - Kirkland investment adviser Rhonda Breard, who is accused of stealing millions of dollars from her clients, pleaded guilty Tuesday in Seattle to one count of mail fraud.
As part of a plea bargain, Breard admitted to bilking 37 of her clients out of $9.4 million. The maximum sentence for mail fraud is 20 years in prison and a $250,000 fine, but standard sentencing range has her facing eight to ten years.
Breard promoted her investment expertise in television infomercials and radio spots as well as classes at community colleges. The U.S. Attorney's Office says Breard told investors their money would be placed in a variety of financial and insurance products. But instead, she used the money to furnish her lavish lifestyle and mailed phony statements to these customers.
Several victims attended the hearing. Kent high school teacher Rick McCurdy said afterwards that he and his wife lost $77,000. He said he just wanted to see Breard to try to understand why she did it.
"We went to one of her seminars in 2005, and we bought into her whole thing -- hook, line and sinker," he said. "You try to trust people, and when people violate that trust, you have to ask why. It hurts."
According to the plea agreement, Breard has agreed to forfeit a number of items including:
- Homes on Lake Washington, in Redmond Wash. and Duvall, Wash., all heavily mortgaged
- 2009 Cadillac Escalade
- 2009 Mercedes Benz SL 550
- Five snowmobiles
- Three jet skis
- Four ATVs
- Various trailers, trucks, cars and mobile homes
The Dept. of Justice also says $100,000 in cash was seized from a safe deposit box and $150,000 was seized from another bank account. The cash will be given back to the victims of the scheme as well as the seized assets once they are sold at auction. Prosecutors say it's nowhere near enough to repay her victims.
Breard will be sentenced in July 9. She is free on her own recognizance until then.
Breard ran Breard and Associates Wealth Management and was licensed to sell securities through Des Moines, Iowa-based ING Financial Partners.
Two of her victims sued her, a co-worker and ING in federal court last month. They allege that ING failed to supervise her even though in the early 1990s she was fired from Smith Barney for unauthorized trading, fined more than $100,000 for misconduct and had her license suspended for 10 days in separate incidents.
Dana Ripley, a spokesman for ING, said in an e-mail Tuesday that the company "is exploring whether an equitable resolution can be reached" with Breard's victims.
The Washington State Department of Financial Institutions also announced its intent to file charges against Breard and to recover the money she took.