Prosecutors: Former Westlake financial adviser admits charges in Ponzi scheme that framed $9.3m investors
Brunst worked with Raymond Erker and Kevin Krantz at an investment firm in Westlake. In documents, Assistant U.S. Attorney Brian McDonough said the three men ran a Ponzi scheme, a financial scam that uses money from new customers to pay those who initially invested. He said in court documents that Brunst helped recruit people to invest in the program. Tara Brunst, 47, of Olmsted Falls, pleaded guilty in US District Court to five counts, including conspiracy, wire fraud and mail fraud. She faces eight to 14 months in prison when Judge Dan Polster sentences her on May 5.
At Thursday’s hearing, McDonough said Brunst was liable for the loss of $150,000 to $250,000. He cited his limited time in the business.
The program began in 2013 and continued until 2018, prosecutors said. Brunst started working there in 2015.
One investor, Thomas Cooper, told Polster that Brunst met with him about his investments. She also emailed him, talked to him, and introduced him to Erker, who owns the businesses.
Cooper said Brunst abused his trust, which resulted in the loss of his life savings.
Erker and Krantz are due to stand trial on March 1 on similar charges before Polster. Erker is also charged with money laundering and making false statements under oath. Erker and Krantz have denied the allegations.
“We understand that Ms. Brunst made a decision based on her personal needs, but we look forward to the opportunity to challenge the government’s evidence,” said Edwin Vargas, Erker’s attorney.
Court records show Erker formed several companies, including Sageguard LLC, GenSource Financial Assurance Co. and Provident Securities Co.
Krantz’s attorney, Justin Roberts, could not be reached for comment.
Erker, Krantz and Brunst are accused of making false and misleading statements to trick people into contributing to the funds, the charges allege. They told investors they were buying guaranteed annuities and notes from GenSource and Provident that were not exposed to the risk of loss and had guaranteed rates of return, according to the charges.
Neither company was licensed to issue annuities and Provident’s notes were unsecured, according to the charges. Investors’ money was diverted or placed in high-risk start-ups, court documents show.
McDonough alleged in documents that the scheme involved placing office fronts in Delaware and Nevada and working with call centers to make the operation legitimate.
In 2019, the Ohio Department of Commerce revoked Erker’s license as an investment adviser.
- Prosecutors: Former Westlake financial adviser admits charges in Ponzi scheme that framed $9.3m investors
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