Ex-Advisor Sentenced to Almost 22 Years in Prison Over Fake-Annuity Scam
What You Need to Know
The ex-advisor sold investments to clients that he misrepresented as annuities and senior secured notes with no risk of loss and with a guaranteed rate of return.
A former registered broker and investment advisor has been sentenced to almost 22 years in prison after being convicted of stealing over $9.3 million from clients as part of an annuities-related Ponzi scheme, according to court documents and the Department of Justice.
After a trial in U.S. District Court for the Northern District of Ohio, Raymond A. Erker, 52, of Avon, Ohio, was sentenced Tuesday by Judge Dan Polster to 262 months in prison. A restitution hearing for Erker has been scheduled for Dec. 9.
From January 2013 through July 2018, Erker developed a scheme in which he stole $9.37 million from at least 54 investors, some of whom were older clients, according to court documents and evidence presented at trial.
As part of his scheme, Erker sold investments to clients that he misrepresented as annuities and senior secured notes with no risk of loss and with a guaranteed rate of return. Court documents state that Erker, without the approval or consent of his clients, diverted funds to other entities that he and his co-defendants controlled and their personal bank accounts.
Erker also failed to disclose to clients that he maintained ownership interests in companies receiving investments from his scheme.
In typical Ponzi style, to keep up with the rates of return promised, Erker falsely claimed that payments made to previous investors were rates of return and interest when the payments were actually new investor funds.
To avoid detection, Erker set up office fronts in Delaware and Nevada, contracted with call centers and created phony websites and account statements that purported to show investor account balances, according to the Justice Department.
Erker was also convicted of making a false statement under oath. On Oct. 9, 2019, while under oath in U.S. Bankruptcy Court for the Northern District of Ohio, Erker stated that he disclosed to investors that he owned the companies the investors gave him money to invest in, when in fact, Erker knew that statement was false.
Co-defendants Kevin M. Krantz and Tara M. Brunst were previously sentenced for their roles in the scheme.
CFP Board Suspension
In 2018, the Certified Financial Planner Board of Standards imposed an automatic interim suspension of Erker’s certified financial planner certification.
The board received evidence that Erker was convicted by a jury in Ohio of two felonies: burglary and menacing by stalking.
