Fired financial adviser arrested on fraud, theft, forgery charges

Police have arrested a Sherwood Park man following an investigation into claims that he misappropriated more than $400,000 from his clients.

The charges stem from an RCMP commercial crime unit’s investigation into the former Investor Group financial adviser’s dealings with clients between 2001 and 2006.

Kerry Scharfenberg, 56, is charged with two counts of fraud over $5,000, two counts of theft over $5,000 and two counts of uttering forged documents.

Scharfenberg was barred from working in “securities related business” by the Mutual Funds Dealers Association of Canada in 2009 following a disciplinary hearing. He was also required to pay more than $500,000 in fines.

“Scharfenberg engaged in a deliberate, cunning campaign of deceit, fraud and forgery designed to drain funds from the accounts of six clients for his personal use and benefit,” the March 9, 2009 decision from the disciplinary hearing reads.

According to the decision, Scharfenberg opened accounts without his clients’ knowledge, then wrote hundreds of thousands of dollars worth of cheques and deposited them into his wife’s account.

He also transferred money between clients’ accounts without their knowledge or consent, the decision said. Signatures on 98 cheques were forged.

The misappropriation began in 2002 with the account of an 85-year-old man and his 69-year-old wife, where Scharfenberg took control and benefited from $153,824.24 of their money, the decision said.

In total, $409,477.24 was misappropriated from six accounts.

“Scharfenberg’s conduct was callous and deliberate,” the decision said.

“He intentionally deprived his clients of monies that he turned to his own use and benefit, and did so without apparent concern for the hurt and harm he thus caused.

“He not only disgraced himself, he also brought disrepute to his employer and to the industry.”

Scharfenberg did not attend or send any reply to the disciplinary hearing, the decision said.

According to the decision, Scharfenberg was fired from Investors Group in 2006, and the company paid clients $471,656 in compensation.

Scharfenberg was originally scheduled to appear in court on fraud charges on May 13, 2011, but failed to show up.

His new court date is set for Jan. 24.