Kristi Berge, a 48-year-old investment advisor from Edina, Minnesota, has been sentenced to two-and-a-half years in federal prison for embezzling $2.1 million from her clients. Following her prison term, she will serve two years of supervised release and must pay over $2.1 million in restitution.
Berge, the founder and CEO of Keep Safe Investments (KSI Financial), operated a registered investment advisory firm that claimed $28 million in assets under management, as per its last regulatory Form ADV filed in May 2023. Prosecutors revealed that she used her position to siphon client funds for personal use, particularly to purchase real estate in the Minneapolis suburb of Edina.
Operating separately from KSI Financial, Berge co-owned a real estate company and diverted her clients’ money to acquire properties. Court documents detail how at least one of these properties was used to house a relative. To disguise her actions, Berge falsely categorized the unauthorized withdrawals as "management" or "administrative" fees.
Prosecutors stated that Berge misappropriated funds between 2020 and 2023, withdrawing amounts ranging from $5,000 to $220,000 from client accounts. She then deposited the stolen money into accounts she controlled under the name of her advisory firm. In a bid to maintain the facade of legitimacy, Berge presented her clients with phony contracts, some bearing forged signatures.
Among the fraudulent tactics she employed, prosecutors highlighted that Berge affixed a client’s signature from unrelated documents onto fabricated "investment/loan agreements" forms. She also forged the signature of a notary public to validate these fake agreements. By doing so, Berge created the illusion of client consent for the unauthorized withdrawals.
Prosecutors further alleged that Berge sought to pacify concerned clients with false reassurances, promising to return their funds along with a guaranteed rate of return. These assurances were designed to lull victims into a false sense of security and prevent them from uncovering her scheme.
Berge’s actions came to light after clients discovered discrepancies in their accounts and reported their concerns. Despite the severity of the charges, her legal team has yet to respond to requests for comment.
The sentencing underscores the importance of vigilance and transparency within the financial advisory industry. This case serves as a stark reminder of the need for robust compliance measures and client awareness to prevent such breaches of trust.
