A former
Ameriprise Financial Inc. adviser pleaded guilty on Wednesday to defrauding 24 clients of almost $1 million, according to an announcement from the U.S. Attorney's Office for the District of Minnesota.
Between 2008 and 2013, Susan Elizabeth Walker, 50, stole $980,000 from clients, which she then used for personal expenses, including expensive vacations and private school tuition, according to the U.S. attorney's complaint.
Ms. Walker opened investment accounts in her own name and in the names of several clients without their permission. She then withdrew money from clients' brokerage and retirement accounts, deposited it into those accounts she controlled, and ultimately withdrew the money for personal use, according to the U.S. attorney's statement.
She had been working at Ameriprise's branch office in Wayzata, Minn., alongside her mother, Barbara J. Stark, from October 2008 until March 2013, when they were terminated by the firm, according to an April order from the Office of Administrative Hearings for the Minnesota Department of Commerce, which sought civil penalties.
Ms. Stark was named in that order, but she was not charged in the U.S. attorney's case.
An attorney representing Ms. Walker, Frederic Bruno, said that he did not believe that her mother would be charged in a separate case.
“[Ms. Walker] entered a plea of guilty acknowledging her misdeeds and will await sentencing,” he said. “My feeling is that Susan will take all the punishment.”
U.S. Attorney Timothy C. Rank, who prosecuted the case, declined to comment on why Ms. Stark was not named, citing a pending investigation.
The
Financial Industry Regulatory Authority Inc. barred Ms. Walker and her mother from the brokerage industry in July 2013 for failing to provide documents in connection with allegations of misappropriating client funds.
(More on Finra: Finra sues B-D owner for improper marketing of unregistered securities)
A spokesman for Ameriprise, Chris Reese, wrote in an e-mailed statement that the firm had reimbursed clients for losses.
The order from the Department of Commerce also accused Ms. Walker of making unsuitable investment recommendations, including advising an 89-year-old client to invest over $75,000 into annuities in 2003, prior to her employment with Ameriprise. She later withdrew funds from those accounts for personal use, according to the order.
In 2009 and 2011, some of the stolen funds went to pay for Ms. Stark's certification with the Certified Financial Planner Board of Standards Inc., according to bank records provided in the Department of Commerce's order.
The CFP Board suspended Ms. Stark's certification in October 2013 after discovering she had been barred by Finra, and permanently revoked the certification in May.
The fraud first came to light in October 2012 while the Minnesota Attorney General's Office was contacting various customers regarding their participation in an unrelated settlement over annuity sales. In the course of that outreach, the attorney general's office uncovered withdrawals from several senior citizens' annuities products that were made without their owners' knowledge, according to the order from the Minnesota Department of Commerce.
