Helena Independent Record
October 26, 2010
A bench trial began Monday in District Court here in the case of Arthur. L. Heffelfinger, who is facing a felony charge of exploitation of an older person by common scheme.
Heffelfinger, a former broker with KMS Services Inc., has admitted he operated a $2.02 million Ponzi scheme but denies the exploitation charge.
Heffelfinger, 63, who had an office in Clancy, is accused of taking about $390,000 from a woman in her 90s who suffered declining health and cognitive impairment and lived in a Helena nursing home.
Lynne Egan, deputy securities commissioner for the state of Montana, testified about when Heffelfinger initially admitted to the scheme in September 2009.
"He said that he had been doing bad things and they'd got out of hand," she said in Judge Kathy Seeley's court.
Egan said Heffelfinger seemed very concerned with one victim in particular, the elderly woman in the nursing home, Mary Parr. She said he had taken nearly all of Parr's money.
Parr was substantially older than his other victims, whose average age was about 70 years old, according to Egan. Parr died in October 2009.
In July, Heffelfinger pleaded guilty to two felony charges of operating a pyramid promotional scheme and theft by common scheme. Heffelfinger admitted he operated the scheme from February 2001 to September 2009 in Lewis and Clark, Jefferson, Broadwater, Missoula, Lake, Judith Basin, Gallatin and Ravalli counties. He also said he used his clients' investment money for his personal use.
In a settlement agreement, KMS, a Seattle-based securities firm, agreed to pay about $975,000 in restitution to Heffelfinger's victims. The firm also agreed to pay a total of $50,000 in fines and investigative costs to the state.
Heffelfinger used about $739,724 of the money for himself and an estimated $917,777 to conduct the Ponzi scheme, according to court documents.
SOURCE: The Missoulian
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