Authorities say a former Bismarck securities and insurance agent defrauded more than 40 people out of more than $3 million in a scam that lasted about 14 years.
The case against Kevin Wanner is outlined in a civil complaint filed on Aug. 11 that seeks to freeze funds from the sale of private property. Wanner has not been criminally charged.
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An affidavit by a North Dakota Securities Department investigator says the scheme started around 2001 and continued through December 2015. Wanner is accused of selling counterfeit CDs to his clients and involving them in a phony investment group called the Bulls and Bears Investment Club.
"Wanner admitted to spending his clients' money for his own personal use," the affidavit says.
Federal prosecutors and Wanner declined Wednesday to comment to The Associated Press.
Court documents allege that one victim invested $500,000 with Wanner and received yearly interest checks of $3,000 to $4,000. The victim said Wanner would roll the matured CD into a new CD, but she never received a federal form for interest paid.
"During that same time period as Wanner's criminal activities, bank records reveal Wanner made cash withdrawals from his business accounts nearly every other day, withdrawing on average $15,355 per month," the affidavit says.
The government alleges that Wanner made about $5 million in the fraud and money laundering scheme and paid about $1.8 million "purported to be interest payments earned on the counterfeit CDs."
The North Dakota securities and insurance commissioners had previously issued cease-and-desist orders to stop Wanner and his business, Precision Financial Services, from operating in the state. Precision Financial Services had been in operation since 1990.
The government is seeking to sequester funds from the sale of a house that was owned by Wanner and his wife. The complaint also says proceeds of the pending sale of a 2011 Ford Convertible Mustang should be forfeited to the government.