HELENA, Mont. – Monica J. Lindeen, Commissioner of Securities and Insurance (CSI), announced today that Arthur Leroy Heffelfinger has pled guilty in Lewis & Clark County District Court to Operating a Pyramid Promotional Scheme (Ponzi Scheme), a felony, and Theft (Common Scheme), also a felony. Heffelfinger was charged in January 2010 with three felonies – operating a ponzi scheme, theft, and exploitation of an older person. His trial for the charge of exploiting an older person will be set for sometime this Fall.
After an extensive investigation beginning in September 2009, Heffelfinger, a former stockbroker for KMS Financial Services, a firm located in Seattle, was charged with operating a ponzi scheme for a period of at least 8 years, for theft, and for exploiting an older person. The charging documents alleged that Heffelfinger diverted funds from at least twenty KMS clients from February 2001 through September 2009, using approximately $739,724 for his own personal use, approximately $917,777 for the purpose of conducting the ponzi scheme, and approximately $364,044 when exploiting the older person, for a collective total of $2,021,546. Heffelfinger sold the victims bogus real estate investment trusts.
Heffelfinger still faces trial on the charge of exploitation of an older person. He has been accused of exploiting an elderly woman who resided at an assisted living home and a nursing home in the Helena area. The woman was in her 90’s, suffered declining health and cognitive impairment and was unable to manage her financial affairs. Heffelfinger has been charged with exploiting her by taking at least $364,044 from her, the bulk of her estate.
“Arthur Heffelfinger defrauded his clients for a long time, many of whom were some of our most vulnerable citizens, and this plea of guilty ensures he will never again do so,” said Commissioner of Securities and Insurance, Monica J. Lindeen. “My office will continue to be proactive in ensuring that those who commit securities fraud are held accountable for their criminal actions.”
The CSI is currently determining whether an action should be filed against the broker-dealer firm for failing to supervise Heffelfinger as provided by law. The CSI cautions potential investors to thoroughly scrutinize and research any investment opportunity or offer.
Contact the CSI with inquiries concerning securities broker-dealers, agents, investment advisers, investment adviser representatives, financial planners, registration status of securities, to report suspected fraud or to obtain consumer information. The CSI provides free investor education and fraud prevention materials in print, on our website and through educational presentations upon request.