NASHVILLE, Tenn. - When Hank Parrott became the President of Estate and Financial Strategies in Brentwood, his goal was to help folks through investing and retirement. However, every once in awhile his company becomes the watch dog when clients nearly fall victim to fraud.
“Been fortunate during a review or something, red flags have come up so we’ve taken action to assist them,” Parrott said.
Unfortunately for one Brentwood woman the District Attorney's Office of Middle Tennessee alleges that her investment advisor, based out of Georgia defrauded her of $1.4 million.
However, the U.S. Securities and Exchange Commission allege the same man, Jay Costa Kelter, 48, defrauded two other retired Tennessee clients out of more than $1.8 million total.
“Unfortunately elder abuse is huge,” said Parrott.
The SEC reports, "Kelter left his former employer in 2013 and managed to convinced the three seniors to move their accounts to a new brokerage firm, so he could continue to provide investment advice and trade on their behalf. The clients opened new accounts at TD Ameritrade and gave Kelter access to the accounts. As alleged in the complaint, Kelter sold securities in two of his clients' accounts to make unauthorized payments to his company BEK Consulting Partners, LLC. Kelter falsely told the two clients that BEK was a company that he was investing in on the clients' behalf."
When in doubt, Parrott advices to take the time to check any potential advisor out. “If your advisor is having you write a check in their name, in their company name, that’s one of those areas, to me that’s a red flag,” he explained. “Everybody is regulated if they’re legitimate and even within the industry with that you can still have problems but start there.”
The SEC alleges that "Kelter used the misappropriated client funds as his own personal piggy bank, buying a luxury car, paying for his personal day-to-day expenses, using one client's funds to return money to another client, and using the funds for futures and options trading in unrelated accounts. Kelter also allegedly guaranteed a third client that he would cover his trading losses up to $200,000, inducing the client to allow Kelter to continue to trade in his account. Kelter falsely told that retiree that he had substantial assets and access to personal funds to fulfill his guarantee when, as alleged, he had no such financial resources."