A former investment adviser who targeted the inactive accounts of her company’s clients, almost half of whom were dead, pleaded guilty Monday to a wire fraud charge.
Redonda Russell, 66, of Fort Worth caused the liquidation of more than $316,000 from First Command Financial accounts, according to a news release from the U.S. attorney’s office.
Russell was employed with First Command for 22 years before leaving it in 2013 and spent her last seven years there as associate director of client services, prosecutors said.
Targeting inactive clients made the fraud more difficult to detect. On March 19, 2012, Russell asked First Command computer specialists to compile a list of clients with life insurance policies or investment accounts with balances greater than $2,000 who were also dead.
According to investigators, Russell used a medallion signature stamp to verify the identities of the defrauded clients so she could perpetuate the fraud electronically, the release said. For more than a year, Russell obtained personal identifying information for 18 First Command clients, eight of whom were dead.
After drafting documents that gave her control over the accounts, Russell got subordinate First Command employees to validate the false documents with a medallion signature stamp, which is like an electronic signature and tends to draw less scrutiny because of its wide acceptance in the industry.
Once she had the medallion stamp, Russell mailed the fraudulent documents to the investment or insurance companies that maintained the accounts and gained control over them. Russell later sent the partner companies documentation that caused them to either liquidate or take a loan out against the targeted accounts, prosecutors said.
Russell took the proceeds from the liquidation of the accounts or the loan and deposited the funds into one of her personal accounts using different signatures, all of which included the last name Russell.
The maximum sentence on the charge is 20 years in prison, a $250,000 fine and restitution. Russell remains free on bail until sentencing, scheduled for Dec. 8, according to the news release.