SEATTLE (CN) - An "investment guru" known for her "Help Me Rhonda" TV and radio ads stole millions from clients to buy "three multimillion-dollar houses, numerous cars, boats, jet-skis and a large stockpile of expensive jewelry," federal prosecutors say. Investors also sued Rhonda Breard in a civil complaint.
The investors say co-defendant ING Financial Partners was "asleep at the switch," and that "Breard had a checkered history with securities regulators, having been fined on several occasions for misconduct, suspended on at least one occasion, and fired from another brokerage for misconduct."
Federal prosecutors charged Breard with mail fraud and arrested her Friday.
Prosecutors say Breard, who built a large client base through "Help Me Rhonda" financial advice spots on local TV and radio stations, took more than $8 million from at least 20 investors.
Breard mailed phony statements to her clients and kept the money for herself, charging documents say.
"Investigators are still determining the extent of the fraud," U.S. Attorney Jenny A. Durkan said in a statement. "We are aggressively trying to learn information about her clients and assets, and we want any assets preserved for victims in this case. We will ask the court to impose a condition that Ms. Breard not dispose of any assets while the investigation into the full scope of the fraud continues."
Breard, who faces 20 years in prison and a $1 million fine in convicted of the single count of mail fraud, was released from custody and ordered not to sell any assets. She must get court approval to spend more than $500.
The Seattle Times reported that Breard tried to sell a "huge" amount of "new and apparently unworn" silver and gold jewelry two weeks before she was arrested. Breard was an independent contractor for ING Financial Partners and worked through her business Breard & Associates Wealth Management - both of which are defendants in the civil complaint filed by James and Shelley Heath.
The fraud came to light in early February, when an ING auditor made an unannounced visit to Breard's Kirkland office, federal prosecutors said. The auditor discovered a locked cabinet with "a number of client files that revealed Breard had not made investments with client money, but in fact used it for her own benefit," according to the United States' complaint against Breard.
In their civil complaint, the Heaths say they "received exceedingly well-crafted forgeries of account statements on a monthly basis, showing their purported investments in great detail."
The Heaths seek damages from Breard, her coworker, Colleen Brown, Breard & Associates Wealth Management and ING, alleging securities violations, negligent supervision, fraud, conversion and breach of fiduciary duty. The Heaths are represented by Steve Berman with Hagens Berman Sobol Shapiro.
Breard's next court appearance is set for March 30.
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