Bellingham Advisor Knutsen Accused of $260K Elder Fraud

BELLINGHAM, WA – A Bellingham man is facing federal charges after allegedly swindling elderly clients out of more than a quarter of a million dollars. JEFFREY M. KNUTSEN, 43, owner of Bellwether Financial Services dba Bellwether Wealth Management, was arrested today on a criminal complaint charging him with wire fraud, U.S. Attorney Jenny A. Durkan announced.

This isn’t Knutsen’s first brush with financial misconduct. Back in July 2005, the Financial Industry Regulatory Authority (FINRA) barred him from working as a stock broker following a customer complaint alleging embezzlement. But instead of staying away from vulnerable investors, Knutsen allegedly continued operating, preying on those least equipped to protect themselves. The scheme targeted as many as 17 victims.

According to the complaint, Knutsen concealed his FINRA ban from clients, claiming he was simply switching to a different online brokerage to lower fees. He then established online accounts at TD Ameritrade and E*Trade in his clients’ names, granting himself full control – including check-writing privileges. He promised a modest one percent annual management fee, but prosecutors allege he pilfered far more, racking up a total of $260,000 in stolen funds.

“The elderly are particularly vulnerable to this type of fraud because some are less familiar with online trading and computer access to accounts,” Durkan stated. “It is critical that trusted friends or family members assist them in tracking their resources and determining who has access to their accounts, so that they do not fall victim to this type of predatory conduct.” The feds are urging families to be vigilant and check in on elderly relatives’ finances.

Knutsen made his initial appearance in U.S. District Court in Seattle today. If convicted of wire fraud, he faces up to 20 years behind bars. The charges contained in the complaint are allegations at this point, and Knutsen is presumed innocent until proven guilty.

Investigators from the FBI and Bellingham Police Department are handling the case, with Assistant U.S. Attorneys Steven Masada and Justin Arnold prosecuting. FINRA offers a free online tool, BrokerCheck, to help investors verify the disciplinary history of brokers and firms. Check it out before handing over your life savings. BrokerCheck website