A former Wells Fargo advisor faces decades in prison after pleading guilty to stealing more than $3 million, according to the Justice Department.
Kenneth A. Welsh faces five counts of wire fraud and one count of investment advisor fraud for stealing from five clients while working for the wirehouse in New Jersey (though the firm is not named in Welsh’s indictment).
According to an indictment filed in November of last year, between July 2017 and March 2021, Welsh “used his position as an investment advisor to develop personal relationships with victims and gain their trust.”
To defraud his clients, Welsh had them sign blank forms under the auspices that the firm would use them to conduct “routine account maintenance.” However, Welsh used the forms to transfer about $2.6 million from clients’ brokerage accounts into those held by Welsh’s relatives. He would use the money for expenses ranging from gambling to luxury items.
Welsh also used forged or manipulated distribution request forms to draw cashiers’ checks totaling about $268,740 against the brokerage firm accounts of several of his clients. He would then use the checks to buy gold by making them out to a New Jersey business specializing in selling coins, gold and other precious metals.
He also forged at least one account statement showing a client’s assets were in legitimate investments when the rep had already spent the client’s money, according to the DOJ.
According to FINRA records, Welsh joined the industry in 2004 at Morgan Stanley. In 2012, he joined Wells Fargo but was fired in 2021 because of the allegations against him. The wirehouse declined to comment for this story.
Welsh was originally arrested in October 2021 and charged by both the DOJ and SEC. According to the commission, Welsh would use Automated Clearing House transactions to transfer funds into credit card accounts held by Welsh’s wife and parents without clients’ authorization.
In one instance, Welsh transferred about $45,000 from an 88-year-old investor’s advisory account into a credit card account held by Welsh’s mother. In total, Welsh made about 123 of these fraudulent transactions, according to the SEC’s 2021 complaint.
Welsh’s sentencing is scheduled for March 26, 2025. Each wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, while the investment advisor fraud carries a maximum potential penalty of five years behind bars.
