Clients tricked out of millions

Trusted financial advisor behind multi-million dollar scam

By Jodi Mohrmann - Managing Editor of special projects
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SEATTLE, Wash. - Inspectors describe him as a financial advisor gone rogue.  They say he betrayed the people who trusted him and walked away with millions of their dollars.

"He tricked them into giving him this money," said US Postal Inspector Jeremy Leder.

Leder is referring to Edward Kahler, who worked for a subsidiary of  AIG for more than 20 years.

"He was authorized to sell things like life insurance and annuities to people who are either about to retire or have already retired," Leder explained.

For most of Kahler's career, he was very successful and honest. But then, authorities say he changed course.

"At some point, he decided he wasn't making enough money doing what he was doing and decided to start defrauding some of his clients," said Leder.

Having spent decades in the business, inspectors say Kahler already had a key element necessary to pull off a scam: trust.

"He had many, many years of legitimate business with some of these clients," said Leder. "When he decided to defraud these people it was as simple as asking them to write him a check. Every single victim we talked to said, 'We trusted him.'"

Kahler's request that clients write their checks out to him should have set off alarms. If a consumer is investing with a firm, any checks or payment would be made to a company, not an individual.

"They would write him checks, large checks, in the amount of $50 to over $200,000," Leder said.

Postal inspectors say the nationwide fraud affected accounts totaling $190 million and Kahler spent the money on himself.

"In reality, he took the money and spent it on lavish expenses, trip to Vegas with his wife, cars, etc," said Leder.

Inspectors add, Kahler was brazen.

"He located someone who was deceased, whose annuity had not been cashed out and basically with just a few clicks of a mouse he was able to surrender the account and had a check for over than $100,000 sent to his own P.O. Box that he controlled," said Leder.

After several complaints were filed, law enforcement quickly caught up with Kahler.

"At no point during our interactions on several occasions did ever admit or say he was sorry for doing what he did," said Leder. "I think he would have continued to do this fraud had we not stepped in and shut him down."

Kahler was convicted of mail and wire fraud charges and faces up to 20 years in federal prison.

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