|California Advisor Stole $3 Million From Clients, SEC Alleges|
|Wednesday, February 22, 2012 15:00|
Modern Ponzi schemes normally create at least the illusion that there's a unique investment product to tempt victims. However, there are always exceptions.
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The SEC argues that Brenda Eschbach simply took $3 million in fresh client funds and deposited them in her own account.
There was apparently a bit of hype about "private non-traded real estate investments," but the vehicles never existed -- Eschbach allegedly asked clients to write out checks to herself or a shell company, which she cashed.
She also appears to have posed as transfer agent for these "private REITs."
When a client wanted his money back, the scheme unraveled very quickly.
One unusual note: the SEC is taking the rare step of keeping Eschbach's broker-dealer affiliations out of the official complaint.
Whether this indicates that they are still looking into potential failures to supervise or simply don't want to entangle innocent institutions in this mess remains to be seen.
However, Eschbach's affiliations are a matter of public record: the troublesome transactions started when she was an Ameriprise rep and continued into her two-year tenure with Purshe Kaplan.