North Dakota Broker Pleads Guilty In Fraud

March 14--A Bismarck securities broker has pleaded guilty to federal charges of mail fraud and money laundering.

Kevin Wanner, a registered securities agent of Minneapolis-based Questar Capital Corporation doing business as Precision Financial, reached a plea agreement and pleaded guilty in U.S. District Court on Tuesday.

In an earlier investigation, the North Dakota Securities Department had found Wanner appeared to have operated a ponzi scheme for more than 15 years, allegedly victimizing 66 North Dakotans, selling fictitious brokered certificates of deposit and unregistered interests in pooled investments.

Rather than investing the money, the department said Wanner was pocketing most of it for personal use, and, in classic ponzi-scheme style, using money from one investor to pay interest to the next in order to keep the scheme going.

When the Securities Department completed its investigation and secured $2.4 million in restitution for victims, the case was recommended to the U.S. Attorney for criminal charges.

According to court documents, Wanner formed Bears & Bulls Investment Club under the guise of allowing individual investors to pool funds. He provided false information and counterfeit documents, including fake account statements and tax documents, to make the investments appear legitimate.

In the plea agreement, it was stated Wanner received more than $3,099,424 from 40 clients and falsely led them to believe he was investing them in certificates of deposit, fixed income bonds and stocks.

By his pleading guilty, the U.S. Attorney's Office agreed to credit him for having accepted responsibility for his actions and for coming to a speedy plea agreement. The prosecutors also said they would recommend a sentence at the low end of the range suggested by federal sentencing guidelines.

Mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. Money laundering has a maximum penalty of 10 years in prison and a $250,000, according to court documents.

An evidentiary hearing will be held in May to determine facts, such as the number of victims, total loss and whether any victims are considered vulnerable.

The findings of the evidentiary hearing will help the judge to decide upon a sentence, which is scheduled for a June 18 hearing. Any restitution will be determined at that time.

Reach Jessica Holdman at 701-250-8261 or [email protected]

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