Investment broker released from custody, barred from liquidating assets

Kirkland securities broker Rhonda Breard couldn't have looked less like the animated, confident financial adviser who once advertised for well-heeled clients in successful infomercials titled "Help Me Rhonda."

Breard, looking drawn and pale, appeared Wednesday in U.S. District Court in Seattle as federal prosecutors explained she could face 20 years in prison and a $1 million fine for the single count of mail fraud she was charged with earlier in the day.

Assistant U.S. Attorney Carl Blackstone said the government has confirmed state regulators' estimates that as many as 20 people who invested money with Breard may have lost nearly $8 million in the alleged scheme, which has been going on since at least 2007, according to the charges.

Mark Bartlett, first assistant U.S. attorney, said after the hearing the FBI is continuing a "very active" independent criminal investigation, looking for others who might have been involved in the fraud and attempting to "identify any and all assets to try to make her victims as whole as possible."

Breard, 47, has been cooperating with federal prosecutors and surrendered Wednesday morning to the U.S. Marshals Service.

At the afternoon court hearing, U.S. Magistrate Judge James Donohoe released her but ordered that she not sell any assets and required that she obtain approval from the court for any expenditure over $500.

Breard attempted to sell a large amount of jewelry in the weeks after her securities license was revoked on Feb. 10.

Her attorney, Ronald Friedman, said she was trying to obtain money to pay back investors.

The charges allege Breard took checks from investors, supposedly to invest them in securities and other financial instruments.

Instead, she used the money to finance a life of luxury that included a $2.6 million house on Lake Washington in Renton, another multimillion-dollar property in Duvall and numerous cars and boats, according to the charges.

After the hearing, Breard was released from custody.

She walked, head down and silent, through a phalanx of reporters, photographers and bystanders outside the downtown courthouse.

Friedman said Breard is under the care of a psychiatrist.

One civil lawsuit already has been filed against Breard and ING Financial Products, the U.S.-based investment arm of Dutch financial giant ING, and others are expected.

The lawsuit alleges the company failed to adequately supervise Breard, who had a checkered regulatory history.

Also named in the lawsuit is Colleen Brown, a business associate of Breards'. Brown has not been charged with a crime.

ING Financial Partners (IFP) spokesman Dana Ripley said the company has been focused on helping Breard's clients and cooperating with authorities.

"IFP is disappointed that a law firm has filed a lawsuit at this early juncture, well before the conclusion of all ongoing investigations," he wrote.

"IFP is currently reviewing the lawsuit. However, IFP intends to defend itself against the claims made and file an appropriate response."

Breard was a licensed ING broker until a surprise audit by the company in February turned up a cache of files kept in a locked cabinet.

She said the cabinet held her personal tax information, but when the auditors opened it they found client files allegedly containing counterfeit account statements that Breard had been using to hide the thefts, according to the charges.

According to regulatory records, Breard 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, according to records kept by the Financial Industry Regulatory Agency.

Breard has operated Breard & Associates Wealth Management for years, first in Bellevue and later at waterfront offices in Kirkland.

She held herself out as a financial expert in TV and radio ads and promotions.

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