Former Wells Fargo Advisor Pleads Guilty to $3 Million Theft -- Barrons.com

By Kenneth Corbin

A former Wells Fargo advisor has pleaded guilty to five counts of fraud stemming from a long-running scheme through which he misappropriated more than $3 million from five clients.

The plea agreement is a major step toward concluding the criminal case against Kenneth Welsh, of River Edge, N.J.

The Justice Department initially filed criminal charges against Welsh in October 2021. At the same time, the Securities and Exchange Commission issued a civil complaint concerning the same matter. The Justice Department terminated its original case and refiled fresh charges a year ago, alleging the same conduct.

Through the scheme, which prosecutors say ran from July 2017 through March 2021, Welsh would sometimes have clients sign blank forms that he explained as necessary for "account maintenance," but he used those documents to transfer funds to accounts controlled by his relatives. Welsh allegedly then used the money for personal expenses such as luxury gifts and gambling, prosecutors said.

Welsh couldn't immediately be reached for comment and his attorney didn't immediately respond to a request for comment about what he is hoping for in a sentence.

The maximum penalty for the five counts in Welsh's indictment is 85 years in prison, though any jail sentence imposed under a plea agreement would likely be a small fraction of that. His sentencing is scheduled for March 26, 2025.

Wells Fargo dismissed Welsh in June 2021 after learning of allegations that he had stolen funds from clients.

The SEC's case against Welsh is pending. In a status letter filed with the U.S. District Court in New Jersey late last month, the commission said it was attempting to negotiate a settlement with Welsh's criminal-defense counsel.

"If the matter cannot be resolved by consent, the SEC and the court will be better able to assess the appropriate remedies against Welsh, including disgorgement and a civil penalty, following Welsh's plea hearing and sentencing," the SEC said.

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November 21, 2024 15:06 ET (20:06 GMT)

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