A Bellingham, Wash., man who did not stop working with financial clients when ordered to do so almost 10 years ago by the Finra, has been sentenced to more than four years in prison for fraud, the acting U.S. attorney for Washington announced Monday.
Jeffrey M. Knutsen, 43, who owned Bellwether Wealth Management, was barred in 2005 from working with any broker-dealer as a stockbroker after a customer complained that he embezzled from the client’s account.
Despite being barred, Knutsen continued to work with clients, many of them elderly. He told clients he had switched brokerages to reduce their fees, Acting U.S. Attorney Annette L. Hayes says. He was sentenced to prison for 51 months for wire fraud and also ordered to pay $255,000 in restitution to 26 clients.
Knutsen set up online accounts with TD Ameritrade and later E*Trade in his clients’ names and retained full control over the accounts, including check-writing privileges. He created more than 200 checks on the clients’ accounts and used the money for himself, according to the FBI.
U.S. District Court Judge James L. Robart notes that Knutsen continued a career of misappropriating money, adding, “This is a crime of greed—pure unadulterated greed—plain and simple.”
“This fraud damaged the elderly victims emotionally as well as financially,” says Hayes. “They trusted Jeffrey Knutsen to honestly invest their savings so they could enjoy a secure retirement. Now they are betrayed and wary as they try to safeguard any savings they have left.”