A former Spokane financial adviser who was barred two years ago by federal regulators from working with investors now faces a 10-count criminal indictment tied to an investigation into $2.9 million of missing money.
Ronald W. Hannes was indicted by a federal grand jury last month on eight counts of wire fraud, one count of mail fraud and one count of investment adviser fraud. The criminal allegations follow the resolution of a probe by the Washington Department of Financial Institutions in which Hannes agreed to pay a fine of $45,000 and not seek employment as an adviser in the future.
Federal investigators allege Hannes, who had been a registered broker for 33 years before he was stripped of his registration in February 2020, recruited at least 21 investors to put money into high-yield bonds, but instead deposited that money in personal accounts. Hannes’ listed attorney did not respond to a request for comment Friday, and he has pleaded not guilty to all charges to a federal judge.
The indictment alleges activity between July 2017 and November 2019, when Hannes worked as an authorized investment adviser for the wealth management firm Woodbury Financial Services. Federal investigators allege Hannes provided false investment summaries to his victims in an effort to get them to reinvest, and was paid in some instances by electronic check, prompting the federal charges.
Those funds were then deposited into a personal account, according to the indictment.
The state investigation dates back even further, with testimony from a married couple that invested with Hannes and realized checks they had paid him dating back to 2012 were not listed on Woodbury accounts. The couple, documents say, told investigators that Hannes said the money had been used to purchase life insurance, which was a lie.
Woodbury fired Hannes in December 2019. State investigators brought charges in March 2020, and in August of that year Hannes signed an order neither admitting nor denying the charges against him, but agreeing to pay the fine and not seek further employment as a broker.
The criminal fraud counts carry penalties of up to 20 years in prison. Federal prosecutors are also seeking the return of roughly $77,000 in investor payments fraudulently deposited into Hannes’ accounts, according to court records.
A jury trial in the case has been scheduled for October before U.S. District Court Judge Thomas O. Rice. Hannes is not in custody.
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