Financial Sociopath Steals and Betrays

Financial Sociopath Steals and Betrays

Tens of millions of dollar lost - hundreds of victims. It's all a part of the financial carnage left behind by a financial adviser turned conman. There are some important lessons to learn from this case of betrayal.
Tens of millions of dollar lost - hundreds of victims. It's all a part of the financial carnage left behind by a financial adviser turned conman. There are some important lessons to learn from this case of betrayal.

Kevin Redden, US Postal Inspector, explained, "A financial sociopath… they have no regard for how they get other people's money and they don't have any regard for what happens to people once they steal their money."

Redden is referring to longtime financial adviser, Wes Rhodes.

"He told people he would be able to get better than average returns sometimes as high as 25% on their money but most often it was closer 7 - 9%," Redden said.

Rhodes' reputation was so solid that he hosted his own radio show focused on investing strategies. He even claimed to have developed his own analytical program.

"That allowed him to predict the movement of stock and bonds and take advantage of those movements before it occurred. So, he claimed he could always be ahead of the curve on those investments," Redden explained.

One problem: it was all a scam. Authorities say he was running a Ponzi scheme for more than 20 years. 125 victims lost more than $40 million dollars. How did he do it?

"He was a chameleon. He could tell very quickly if you had an interest, he would adopt that interest," Redden explained.

Postal inspectors say they were surprised by how long the scam worked.

"His initial investors invested with him in 1985 and they didn't learn their money was gone until 2006 when the fraud was disclosed by the SEC," said Redden.

The take away from this case: always be prepared to question your adviser.

"You need to be able to monitor your investment independently of your adviser. You need to be able to see on paper," Redden advised.

Wes Rhodes was convicted of mail fraud and money laundering. He is serving a 10-year federal prison sentence and was ordered to pay more than $20 million in restitution to victims.

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