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[January 13, 2007]

Woman faces fraud charges: The former financial adviser is accused of stealing $1.3 million from her customers.

(Roanoke Times, The (Roanoke, VA) (KRT) Via Thomson Dialog NewsEdge) Jan. 13--A Daleville woman who was recently convicted of animal cruelty for neglecting dozens of dogs is now also facing federal charges of fraud and money laundering.

Former financial adviser Monica Blair Yates, 40, is accused of stealing about $1.3 million from her customers and depositing it into her own accounts.

She might have even used it to buy more pet products, said Botetourt County Commonwealth's Attorney Joel Branscom.

Yates could not be reached for comment and has not yet obtained an attorney for the federal case.

According to the indictment, Yates devised her financial scheme when she worked at CUNA Mutual Life Insurance and later at Merrill Lynch, Pierce, Fenner & Smith Inc.

Court documents claim Yates persuaded her clients to cancel their long-term annuities and let her invest their money in short-term products instead.

She promised they would earn higher rates of return than CUNA offered and told them any penalties they incurred from termination would be made up for in returns, officials say.

The indictment states that instead of reinvesting the money, Yates deposited it in her personal banking accounts. In some cases, she prepared fake account statements to give customers the impression their money was earning monthly interest, officials said.

One client's loss totaled $171,551; others' approached $300,000.

Yates' activities affected 18 CUNA customers and four Merrill Lynch customers, according to the indictment. Although the actual loss to victims was $1.3 million, prosecutors say Yates had made plans to steal more than $3.5 million.

Late last year, Yates was charged with similar crimes in Botetourt County stemming from the same suspected behavior. Branscom said the state would likely dismiss those charges now to allow federal prosecutors to pursue their case.

Botetourt County authorities became suspicious of possible financial misdeeds last year while investigating Yates' neglect of several pets. Branscom said she owned a large amount of property and was spending inordinate amounts of money on pets.

"She was spending just thousands of dollars on these dogs that she would then just hole up in her home," Branscom said.

Yates had already been in trouble once before in connection with the discovery of 25 sick dogs in her house, records show.

She was sentenced in November to five years in prison, all suspended, in the animal case.

Yates is also involved in two civil cases stemming from her employment with CUNA and Merrill Lynch.

CUNA filed the first case in federal court in July, claiming that Yates had violated a noncompete clause by going to work for Merrill Lynch but continuing to solicit CUNA customers.

According to Thomas Winn and Joshua Long with Woods Rogers, who represent CUNA, they became aware of possible financial crimes while pursuing the civil case in federal court. As a result, they amended their complaint to include allegations of theft from clients and referred their concerns to federal investigators.

That case has been stayed pending the outcome of the federal criminal matter, Winn said.

Finally, Yates is also the subject of a lawsuit filed by Merrill Lynch in Botetourt County Court in October. That suit accuses her of diverting her clients' money into her own accounts for personal gain.

Judge Malfourd "Bo" Trumbo entered a default judgment in that case finding Yates liable, but he has not yet decided what the amount of damages will be.

Yates is incarcerated at the Botetourt County Jail on the state charges, Branscom said, but after those charges are dropped she may be transferred to federal custody.

She faces a maximum of 160 years in prison and $2,750,000 in fines on the federal charges.

Copyright (c) 2007, The Roanoke Times, Va.
Distributed by McClatchy-Tribune Business News.
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