Consumer Alert: Financial sociopath stole millions from clients
Wes Rhodes was convicted of mail fraud and money laundering.
Authorities were baffled with how long this scam lasted. One financial adviser deemed a financial sociopath stole more than $40 million from his clients for more than 20 years before he was caught.
“He's a financial sociopath," says Kevin Redden, a U.S. Postal Inspector. "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.”
Postal inspector Kevin Redden is referring to longtime financial adviser, Wes Rhodes.
“He told people he would be able to get better than average returns, sometimes as high as 25 percent on their money, but most often it was closer seven or nine percent," says Redden.
Rhodes' reputation was so solid that he hosted his own radio show that 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," says Redden. "So, he claimed he could always be ahead of the curve on those investments.”
But there was one problem. It was all a scam. Authorities say he was running a Ponzi scheme for more than 20 years. More than 125 victims lost more than $40 million.
How did he do it?
“He was a chameleon," says Redden. "He could tell very quickly if you had an interest, he would adopt that interest.”
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," says Redden.
The take away from this case is that you should always be prepared to question your adviser.
“You need to be able to monitor your investment independently of your adviser," says Redden. "You need to be able to see on paper.”
Wes Rhodes was convicted of mail fraud and money laundering. He is serving a ten year federal prison sentence and was ordered to pay more than $20 million in restitution to victims.