Former investment advisor Raymond A. Erker of Avon, Ohio, was found guilty of stealing more than $9.3 million from clients in an elaborate Ponzi scheme that involved two other colleagues at his firm, Sageguard Wealth Management, the U.S. Attorney’s Office said.
His co-defendants, advisor Tara Brunst and accountant Kevin Krantz, previously pleaded guilty to their part in the scheme, and both are awaiting sentencings that could mean a maximum 20 years in prison for each of them.
Erker is scheduled to be sentenced July 7. His trial lasted four days and a jury found him guilty after three days of deliberations, according to Cleveland.com.
His attorney, Edwin Vargas of Cleveland, said that “more likely than not we will file an appeal.” Erker also faces up to 20 years in prison.
“We obviously were disappointed in the verdict,” Vargas said of the Wednesday decision. “And we will do what we can to mitigate the type of sentence he gets.”
Erker had owned several investment and asset management companies under the Sageguard Wealth Management brand beginning in 2003, according to the September 2020 indictment. In addition, he formed GenSource Financial Assurance Company in September 2012 and Provident Securities in January 2015.
From January 2013 through July 2018, Erker with the help of Brunst and Krantz, ran a Ponzi scheme, inducing at least 54 investors to purchase about $9.3 million in annuities and senior secured notes in GenSource and Provident when neither company was authorized to issue such investment vehicles, the indictment stated. Erker misrepresented those investments as annuities and senior secured notes with no risk of loss and a guaranteed rate of return. But instead of going into those secure, low-risk investments, the money raised from new investors was diverted into Erker’s personal bank account and used to pay returns to previous investors, the indictment said.
“To avoid detection, Erker and his co-defendants 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,” the U.S. Attorney’s Office said in a statement. “Erker was also convicted of making a false statement under oath. On October 9, 2019, while under oath in the United States 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 to be false.”
According to AdvisorInfo, Erker had spent seven years as a licensed investment advisor at LPL Financial from March 2003 to November 2010, when he was discharged for borrowing money from a customer. He then spent one year at JP Turner & Company Capital management before striking out on his own.
The Ohio Division of Securities revoked his license in August 2018 following the Ponzi scheme allegations.