Inspectors explain 20-year scheme that cost victims millions
Updated On: Apr 05 2014 07:00:00 AM EDT
Tens of millions of dollar were lost in a scam that victimized hundreds of people. And the entire scheme centered around a financial adviser who turned into a con man.
"A financial sociopath," U.S. Postal Inspector Kevin Redden call the man. "They have no regard for how they get other people's money and they don't have any regard for what happens to people once they steal their money."
Redden is referring to longtime financial adviser Wes Rhodes in Portland.
"He told people he would be able to get better than average returns sometimes as high as 25percent on their money but most often it was closer to 7 to 9 percent," said Redden.
Rhodes' reputation was so solid that he hosted his own radio show focused on investing strategies. He even claimed to have developed his own analytical program.
"That allowed him to predict the movement of stock and bonds and take advantage of those movements before it occurred. So, he claimed he could always be ahead of the curve on those investments," explained Redden.
But the whole thing was a scam. Authorities say he was running a Ponzi scheme for more than 20 years. Inspectors say 125 victims lost more than $40 million. So how did he do it?
"He was a chameleon. He could tell very quickly if you had an interest, he would adopt that interest," said Redden.
Postal inspectors say they were surprised by how long the scam worked.
"His initial investors invested with him in 1985 and they didn't learn their money was gone until 2006 when the fraud was disclosed by the SEC," Redden explained.
Rhodes was convicted of mail fraud and money laundering. He is serving a 10-year federal prison sentence and was ordered to pay more than $20 million in restitution to victims.
The take-away from this case is to always be prepared to question your adviser.
"You need to be able to monitor your investment independently of your adviser," said Redden. "You need to be able to see on paper."
Copyright 2014 by News4Jax.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.