CEO of Keep Safe Investments Gets 2.5 Years in Prison for Stealing From Clients
Sunday, Dec 8, 2024 12:36 am ET
A Minnesota investment advisor has been sentenced to two-and-a-half years in prison for stealing $2.1 million from her clients. Kristi Berge, 48, of Edina, Minn., pleaded guilty to one count of wire fraud in March and received her sentence this week. Berge was ordered to serve two years of supervised release following her prison term and to pay just over $2.1 million in restitution.
Berge was the founder and CEO of Keep Safe Investments, also known as KSI Financial, which acted as a financial planning firm. She was registered with the SEC under KSI Financial in 2013 before her registration ended at the end of last year, according to commission records. Berge also co-owned J&K Connect, which invested in real estate by buying, renovating, and selling properties for a profit, with offices for all her companies in Edina, Minn.
But starting in June 2020 and for nearly three years, Berge stole about $2.1 million from several clients’ accounts by claiming that she’d maintain their money “in safe and secure investment accounts,” like individual retirement accounts and 401(k) plans. However, unbeknownst to her clients, Berge repeatedly withdrew clients’ funds from their accounts, typically taking between $5,000 and $220,000 out at a time and transferring them to her bank accounts.
Berge would then use the money to purchase properties for J&K Connect and, in some cases, use the client funds to pay for a property one of her family members used as a residence. She’d sometimes falsely label these withdrawals as “management” or “administrative” fees to make it seem like they were part of regular business.
The DOJ was not the only party pursuing Berge over these accusations. Earlier this year, United Airlines filed a lawsuit in Minnesota federal court against Berge and her business entities, arguing she “improperly” used employee retirement plan assets for “personal gain.” The suit describes how United employees can invest retirement contributions via a self-directed brokerage account known as a Personal Choice Retirement Account via Charles Schwab and can choose to hire an independent advisor to advise on their funds in the PRCA.
Berge was allegedly one of those advisors and entered into contracts with several participants, according to United. However, some employees’ contracts included agreements with J&K Connect, in which they agreed to loan assets from their PRCA to the real estate company. Specifically, KSI would charge a “management fee” that would “in reality, be used to fund a loan from the participant to J&K.” This meant the fees purporting to be for investment advice were really going to J&K, according to the United suit.
“Through this arrangement, and by falsely representing the amounts to the Plan as fees, Berge, KSI and J&K contained control over Plan assets to which they were not entitled, with the intent to use those assets for their own gain,” the United complaint read.
According to United, Schwab discovered the ruse in December 2022, alerting the airline and Berge that they were aware the plan assets went to J&K and not to Berge as advisory fees and terminated KSI as an investment advisor on Schwab’s platform.
Berge’s attorneys did not respond to requests for comment prior to publication, but according to the Minnesota Star Tribune, attorney Bruce Rivers wrote the court asking for a sentence of six months home confinement, writing that Berge had no prior criminal history and had never “set out to hurt anyone.” “Her business took a turn, and she made some serious mistakes along the way and has every intention to repay those who were harmed,” Rivers wrote.

The case serves as a reminder of the importance of thorough due diligence when selecting an investment advisor and the need for regular monitoring of investment accounts. Clients should be wary of promises of high returns with low risk and be cautious of advisors who lack transparency in their financial reporting. Regulators and financial institutions should also strengthen their oversight and surveillance of investment advisors to prevent such fraudulent activities in the future.