A federal court has sentenced a Pennsylvania investment advisor to more than 21 years in prison for squandering millions of dollars in investors' assets while falsifying statements to indicate strong returns and stable principal balances.
Robert Glenn Bard, who ran the independent advisory firm Vision Specialist Group as its sole proprietor, was found guilty on 21 counts of fraud stemming from a litany of misrepresentations made to clients from December 2004 through August 2009.
Bard's attorney, Heidi Freese, could not immediately be reached for comment.
The criminal case against Bard and his firm follows a civil action the SEC brought in 2009, alleging that Bard sought out "unsophisticated investors" and made promises of high yields and stable principal through vehicles such as bonds, money market funds and CDs.
In reality, the indictment charged, Bard was using clients' assets to make risky and unsuccessful bets on penny stocks, and then concealed the losses with fraudulent statements.
In addition to the prison sentence of 262 months, Bard was ordered to repay $4.2 million in restitution to 66 clients he had defrauded.
Bard was found to have targeted investors, many of whom were elderly, who were seeking stable investments, winning control of their assets under false pretenses, not investing funds as he had promised and then masking the losses when the investments went south.
The U.S. attorney described him as something of a confidence man, trading on a reputation as a "deeply religious" and civic-minded member of the small rural community of Warfordsburg, Penn., where Vision Specialist was headquartered. The firm was registered with securities authorities in Pennsylvania and West Virginia, and served clients in those states as well as Maryland and Tennessee.
Prior to opening up Vision Specialist, Bard had worked as a stock broker before he was terminated in September 2004 for forging customer signatures, and again three months later from another firm when it learned of his past transgressions. An ensuing FINRA investigation eventually resulted in a lifetime ban from the brokerage sector. The criminal indictment charged that Bard had failed to disclose that incident, as well as a personal bankruptcy, from Vision Specialist's clients.
Vision Specialist offered clients fee-based advisory and financial planning services, using T.D. Ameritrade as a broker-dealer until March 2009. That relationship ended when, after an internal investigation, T.D. determined that Bard had comingled accounts, made unauthorized transfers and charged excessive fees.
Bard was charged with having misrepresented to clients the reason T.D. moved their accounts over to its own retail business, telling them, erroneously, that T.D. had opted to sever ties with "small" advisors. Bard then secured the custodial services of another and then a third broker, and actively encouraged investors to move their accounts to follow his practice.
Judge Sylvia Rambo of the U.S. District Court for Pennsylvania's Middle District remanded Bard to the custody of the U.S. Marshals Service, recommending that he serve his sentence at a medium-security federal prison in Cumberland, Md.
"The extensive evidence presented at trial demonstrated that Defendant's verbal misrepresentations caused his clients to invest with him and continue doing so," Rambo wrote in a July opinion determining the range of losses attributable to Bard's scheme. "Defendant created fake account statements to substantiate his assurances that his clients' investments were increasing in value. This, of course, was in stark contrast to the reality of the value of their investments. The court has little trouble concluding that Defendants conduct caused the funds invested with him to be lost."
She added: "Each of his clients came to Defendant and asked him to place their money in a relatively risk-free investment. Defendant knowingly did just the opposite."
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