Renton couple's suit claims Kirkland broker cost them life savings

A Renton couple has filed the first of what is expected to be a bevy of lawsuits against Kirkland securities broker Rhonda Breard, alleging they lost their life savings in what state regulators suspect is a multimillion-dollar Ponzi scheme.

James and Shelley Heath also sued a Breard work associate, Colleen Brown, and ING Financial Partners, the U.S.-based investment subsidiary of the Dutch financial giant that licensed Breard.

The lawsuit, filed Tuesday in U.S. District Court in Seattle, claims ING Financial Services licensed Breard and Brown then failed to supervise them. It claims ING has a history of failing to supervise brokers and has paid "huge fines and/or state-ordered restitution to clients" over the past several years.

The suit, filed by the Seattle firm Hagens Berman, alleges the Heaths invested an undisclosed sum with Breard and lost it all. Attorney Karl Barth declined to say how much money was involved.

"It was a significant sum to them," Barth said of the Heaths. "It amounted to their life savings."

So far, the state Department of Financial Institutions said it has identified upward of 20 former Breard investors who may have lost $8 million or more.

No criminal charges have been filed against Breard.

Breard, 47, ran Breard & Associates Wealth Management and held herself out as a financial expert in TV and radio ads and promotions. She operated out of a waterfront office in Kirkland and flaunted a lavish lifestyle with a $2.6 million house on Lake Washington, other valuable real estate and numerous cars and boats.

The suit claims she has a checkered regulatory past and in 1991 was forced to quit the investment firm Smith Barney after allegations of unauthorized trading.

Two other actions against her resulted in fines totaling more than $95,000. In 1993 she was censured and fined, and her license was suspended for unauthorized trading.

"These numerous instances of misconduct should have raised 'red flags,' " and ING should have watched her closely, but didn't, the lawsuit claims.

ING Financial Partners spokesman Dana Ripley said the company has been focused on helping Breard's clients and cooperating with authorities. He said the company had not seen the suit and can't comment.

Brown, contacted Tuesday night at her home in Duvall, said she was unaware of the suit until she saw a story on the evening news.

She said she did not have an attorney and didn't think she should comment. She did acknowledge she had worked with Breard. "Unfortunately," she said.

The Heaths allege Breard began soliciting checks from some of her clients in 2007, saying she had a new investment opportunity.

The lawsuit alleges that Breard cashed the checks for her own use and then falsified statements to hide the fraud.

ING pulled her securities license Feb. 10, the same day Breard shuttered her Kirkland office and just before state regulators opened an investigation after some investors noticed the allegedly counterfeit statements.

Breard since has hired a white-collar criminal-defense attorney, Ronald Friedman, who says she is cooperating with federal investigators. He said he expects his client will be charged criminally.

Friedman had no comment about the lawsuit filed Tuesday.

Mike Carter: 206-464-3706 or mcarter@seattletimes.com