January 25, 2011
Today Lewis and Clark County District Court Judge Kathy Seeley sentenced Helena resident and former securities broker Arthur Leroy Heffelfinger to 30 years with 10 years suspended and ordered him to pay nearly a million dollars in restitution. Heffelfinger was sentenced 10 years for each of three counts, which included operating a ponzi scheme, exploitation of an older person, and theft.
“I am relieved we were able to bring justice to the victims involved in this case,” said Montana Commissioner of Securities and Insurance Monica Lindeen, “Judge Seely’s sentence sends a strong message to others that financial exploitation will not be tolerated. My number one goal is to protect consumers while maintaining trust with the businesses operating legitimately in Montana.”
After an extensive investigation last year by the Commissioner’s Office, Heffelfinger was charged with operating a Ponzi scheme for a period of at least 8 years, for Theft, and for Exploiting an Older Person. Heffelfinger, a former stockbroker for KMS Financial Services, diverted funds from at least twenty KMS clients from February 2001 through September 2009. He used approximately $739,724 for personal use, approximately $917,777 for the purpose of conducting the Ponzi scheme, and approximately $364,044 when exploiting the older person, for a collective total of $2,021,546.
In July 2010, Heffelfinger entered guilty pleas to the charges of operating a Ponzi Scheme and Theft but claimed his innocence to the Elder Exploitation charge. The elder exploitation charge involved Heffelfinger’s exploitation of Mary Parr, an elderly woman who resided at the Waterford senior living facility in Helena. Mary Parr was a nurse and spent much of her life working as a missionary in Africa. In 1999, Mary and her husband, Monte, moved to Helena to be close to their daughter because Monte had advanced Alzheimer’s disease. Shortly after moving to Helena, Mary and Monte hired Heffelfinger as their financial advisor. Almost immediately, Heffelfinger began stealing the elderly couple’s money. Monte died in 2002 from Alzheimer’s disease and Mary died in 2009, at the age of 97, from advanced dementia. Between 2001 and 2009, Heffelfinger took at least $364,044 from Mary Parr, the bulk of her estate. After a two day bench trial, Judge Seeley found Heffelfinger guilty of exploiting Mary Parr.
In August 2010, Lindeen’s office reached an agreement with KMS Financial Services, the broker-dealer firm Heffelfinger represented. KMS agreed to pay in excess of $975,000 in restitution to Heffelfinger’s victims. In handing down Heffelfinger’s sentence today, Judge Seeley ordered Heffelfinger to repay KMS the money it paid to his victims.