A seven-day trial in Northeast Ohio ended this week with a federal jury finding a former advisor who fleeced his elderly of investors out of more than $9.3 million guilty on a dozen criminal charges.
Raymond A. Erker, 50, was convicted Wednesday of conspiracy to commit mail fraud and wire fraud; mail fraud; three counts of wire fraud; six counts of money laundering; and making a false statement under oath. He is slated to be sentenced July 7 in the
Erker was the final defendant found guilty in the Ponzi scheme case involving criminal acts committed by Sageguard Wealth Management in Westlake, Ohio, from January 2013 through January 2018.
Erker’s co-defendants, Kevin Krantz, 56, and Tara M. Brunst, 47,
Erker was an investment advisor licensed in Ohio since March 2003, according to a federal indictment. He formed Sageguard Wealth Management and a number of other entities under the Sageguard name in October 2003.
Court documents said Brunst joined Sageguard as an advisor in 2015 after being fired from PNC Investments, while Krantz, a certified public accountant, came on as Sageguard’s chief financial officer in 2016.
Federal investigators said the five-year Sageguard scheme involved Erker and his cohorts attracting elderly targets and selling them investments misrepresented as annuities and senior secured notes with no risk of loss and a guaranteed rate of return.
In reality, investor funds were diverted to personal bank accounts and high-risk business entities controlled by the defendants without consent. To keep up with promised rates of return, Erker and his team used new investor funds to keep their original investors happy and unaware.
By the end of the deception, Sageguard drained $9,366,976.37 from their targets. To keep the Ponzi scheme going, the firm established office fronts in Delaware and Nevada; contracted with call centers to handle communication with clients; and created fake websites and account statements that purported to show investor account balances.
Erker’s conviction of making a false statement under oath stems from a court hearing from October 2019, according to court records. While under oath in the U.S. Bankruptcy Court for the Northern District of Ohio, Erker said that he told his investors that he controlled the companies they were investing in. Investigators said Erker knew that statement to be false.
The news station said his victims, meanwhile, expressed deep hurt and embarrassment for trusting Erker and going along with what they believed to be safe investments.
One woman testified that her mother invested her life savings with Erker. The $220,000 she lost came from years of working as a maternity nurse and included money she relied on for medications.
The woman died about three weeks before Erker’s trial began,
When discussing the case with Financial Planning in the wake of Brunst pleading guilty and during the lead up to Erker’s trial,
That false happiness creates a sense of comfort and security, Chase said, allowing manipulative advisors to sink their hooks deeper into their targets.
“In this case, it was pretty clever because they weren't selling something like a promissory note where they just promised to pay them back, or some exotic kind of investment that was misrepresented,” Chase said. “Instead, they were presented as senior secured notes and annuities which are plain, vanilla financial investments that are usually appropriate in most cases for senior investors and conservative investors.”
He added that the combination of older, trusting clients and technical sophistication made the crime even harder to sniff out.
“They actually went to some elaborate lengths to further the fraud and keep it disguised so that they could perpetuate it,” Chase said. “We're seeing more and hearing more about the SEC cracking down on this, but this is unfortunately just the downside of technology. How easy it is to use it and access it.”
