A former Spokane-based financial adviser pleaded guilty to investment adviser fraud in mid-February and was sentenced to probation and restitution for stealing millions from over a dozen clients from 2003 to 2019.

Ronald W. Hannes, who operated Hannes Financial Services Inc., has been ordered by U.S. District Judge Thomas O. Rice to serve five years of probation and pay restitution of $3.18 million.

State and federal investigators found that Hannes was engaged in a scheme to defraud at least 21 investors, some of whom were Hannes's previous clients or friends, according to a press release from the office of Vanessa R. Waldref, U.S. Attorney for the Eastern District of Washington.

Hannes, now in his mid-70s, was terminated in December 2019 from the Spokane office of Woodbury Financial Services Inc., an Oakdale, Minnesota-based financial services company that Hannes had been affiliated with since 1994, the Journal previously reported.

Investigators found that, in one instance, Hannes had collected money from a married couple for a life insurance policy and kept the funds instead of forwarding to the insurance company. A separate investigation found that some of his clients made credit card payments on his behalf.

Hannes told some clients that his investment opportunities offered returns up to 7% and could be rolled over into new investments at the end of the fixed terms. Many clients rolled over those investments instead of taking withdrawals.

Authorities were alerted of Hannes' fraud after some clients complained to Woodbury about missing account statements for the fixed-rate investments they were told they were making payments on.

In 2020, Hannes was banned from working as a financial adviser by the Federal Industry Regulatory Authority for his conduct and refusal to disclose where or how the stolen funds were spent.

Richard Collodi, special agent in charge of the FBI Seattle Field Office, says in the release that, “Not only did Mr. Hannes fail to provide honest investment services, but he also defrauded people he knew by taking advantage of previous business clients, friendships, and referrals for his own gain."