A former Seattle-area investment advisor and broker has been sentenced to prison for nearly three years after a prolonged scheme in which he defrauded a client of more than half a million dollars.
On Friday, a federal judge in Washington handed down a 32-month prison sentence to 63-year-old Michael Raineri, who siphoned funds from a client’s trust account over the course of six years.
Raineri had sought a far lighter sentence. In a sentencing memo submitted earlier this month, his attorney requested a term of 12 months and one day, arguing that it aligned with a recommendation from Raineri’s probation officer. The request was rejected, as the court weighed the extent of the fraud and the breach of trust at the heart of the case.
In June, Raineri pleaded guilty to one count of wire fraud. His attorney, federal public defender Gregory Murphy, emphasized his client’s “acceptance of responsibility” and his “frequently expressed remorse.” Murphy also noted that Raineri had liquidated personal assets in an effort to begin repaying the victim. Despite these efforts, prosecutors pressed the court to recognize the seriousness of the betrayal, especially given the length of time over which the misconduct occurred. Murphy did not immediately respond to a request for comment following the sentencing.
The fraud centered on a client who, in 2013, inherited approximately $2 million through a revocable trust. Seeking security for retirement, the client made it clear that he wanted his funds managed conservatively, without unnecessary risk. He engaged a team of advisors that included Raineri. According to the Justice Department, Raineri quickly set about cultivating a personal relationship with the client, presenting himself as both trusted advisor and confidant.
Prosecutors say Raineri exploited that trust systematically. He persuaded the client to provide him with blank checks, power of attorney, and even a key to his apartment. With these tools in hand, prosecutors allege, he was able to perpetrate a years-long scheme to siphon funds under false pretenses.
Between 2016 and 2020, Raineri withdrew $397,000 using 12 blank checks. He routed the money through another client’s account before depositing it into his own. In addition, he transferred $115,226 directly from the client’s account into his personal accounts and even used client funds to make payments on a leased luxury car.
The scheme unraveled in 2022, when the victim began raising concerns about discrepancies in his account. An audit followed, uncovering the theft in detail. By April 2023, Securities America, now part of Osaic, terminated Raineri’s registration. Twelve days later, Finra expelled him from the industry. In July 2024, the Washington State Securities Division issued its own permanent bar. Osaic declined to comment on the matter or on Raineri’s prior affiliation with Securities America. He was formally indicted in November 2024.
In court filings, Raineri’s attorney painted a picture of his client’s professional trajectory, noting that he began his career in banking before transitioning to wealth management. Over his 16-year career, he served around 60 clients. The defense stressed that Raineri stole from only one client but conceded that the relationship between the two devolved into what it described as “dysfunctional.” The memo described a situation where professional boundaries collapsed, leaving space for resentment to build. Ultimately, rather than re-establish those boundaries or step away from the relationship, Raineri chose to exploit the client financially.
The court was unmoved by attempts to frame the fraud as an aberration in an otherwise stable career. Instead, the judge emphasized the betrayal of trust, the calculated nature of the scheme, and the damage inflicted on a client who had sought security in retirement. In addition to the prison term, Raineri was ordered to report at a later date, as determined by probation or pretrial services, to begin serving his sentence.
For advisors and RIAs, the case underscores critical lessons about fiduciary responsibility, client trust, and the devastating consequences of misconduct. Unlike isolated compliance lapses or technical violations, Raineri’s actions represented an extended, deliberate abuse of his position. It highlights the importance of oversight and internal safeguards—both within firms and through regulatory bodies—to detect misconduct before it can escalate into significant financial harm.
It also serves as a reminder of the fragile nature of the advisor-client relationship. Clients, especially those who inherit or otherwise come into substantial assets, often arrive with heightened vulnerability and reliance on professional guidance. When that trust is abused, the damage extends beyond financial loss; it strikes at the foundation of the advisory profession itself.
For firms, the incident points to the necessity of rigorous supervision. Advisors who cultivate unusually close relationships with clients—such as gaining access to personal residences, receiving blank checks, or holding power of attorney—should be subject to heightened scrutiny. These red flags can indicate situations where boundaries have blurred, creating risk not only for the client but also for the firm’s reputation and liability.
The case also raises questions about client education and empowerment. Advisors who emphasize transparency and encourage clients to retain independent oversight—through accountants, legal counsel, or family members—help reduce the likelihood of unchecked authority. RIAs may wish to proactively incorporate client education into their practice, particularly around safeguarding against potential fraud and ensuring that multiple eyes are monitoring accounts and transactions.
Regulatory bodies acted swiftly once the fraud surfaced, with Finra and the Washington State Securities Division moving to permanently bar Raineri from the industry. These steps were critical, but the lag between the onset of misconduct and its detection illustrates the challenges regulators face in identifying fraud that is cloaked in personal trust and relationship-building.
The financial planning profession depends on credibility. Every instance of misconduct, especially one of this magnitude, threatens to erode client confidence across the industry. Advisors can use this case as a teaching moment, both internally within their firms and externally in conversations with clients. By acknowledging the case and reinforcing the firm’s own safeguards, advisors can transform a troubling episode into an opportunity to reassure clients of their unwavering commitment to fiduciary duty.
Ultimately, while Raineri’s sentence marks accountability for his actions, the broader message for advisors and RIAs is clear: vigilance, transparency, and strong boundaries are indispensable. A career’s worth of trust can be destroyed by a single extended lapse in integrity, and the consequences—for clients, for firms, and for the advisor—are lasting.
For Raineri, the sentence brings his career in wealth management to a definitive close. For the profession at large, it is a stark reminder that ethical conduct is not optional, but foundational to serving clients effectively and sustaining long-term trust.
