York-area financial consultant indicted on fraud charges
The owner of a Springettsbury Township-based financial consulting firm is accused of defrauding his clients out of more than $1 million, according to officials.
Raymond Oliver Kraft Jr., 63, was indicted by a federal grand jury Wednesday, July 25, on charges of mail fraud and money laundering, according to federal court records.
His indictment alleges that he, through his financial consulting business WiseKraft Solutions, defrauded clients from 2011 until earlier this year. The clients, according to the indictment, live in York County, Maryland and New York.
Most of his clients listed in the indictment were about 70 or older.
Kraft was previously the board president for the Arc of York County, which is a nonprofit organization dedicated to improving the lives of people with intellectual disabilities and their families, according to the organization's website.
In a statement on the Arc of York County's website, the organization said Kraft was removed from his position after the organization became aware of the charges on Tuesday, July 31.
Kraft's business is located at 2215 E. Market St., Suite 100, in Springettsbury Township, according to the business's website. The website was still active on Tuesday but had been taken down when visited Thursday, Aug. 2.
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Accounts: Kraft's indictment alleges he defrauded six clients — three from York County, one each from New York and Maryland, and a trust fund.
In 2012, Kraft entered agreements with the clients to provide them with financial planning, business management, and consulting services, according to this indictment.
In March 2012 he created "for the benefit of," or FBO, accounts for his clients in their names, but he was the sole owner of the accounts except for one of them, according to his indictment.
Kraft — not his clients — received statements for each account, according to officials.
Three years later, Fulton Bank questioned Kraft about the legitimacy of certain transactions involving the accounts, and two months later they closed his accounts, officials said.
The bank sent letters to Kraft's clients advising them of the closure and suggested they have an accountant review their account, the indictment states.
In a response to those letters, Kraft told his clients that the bank was retaliating against him because of disagreements, and that Kraft always had his clients' interests at heart, court documents state.
Officials said Kraft tried to establish those same accounts with York Traditions Bank, but that bank questioned the legitimacy of opening the accounts. In place of those accounts, he opened a reserve account with the bank, according to his indictment.
The funds from the FBO accounts were transferred into the reserve account, according to authorities.
Defrauding: Officials allege Kraft defrauded his customers from 2011 until February 2018.
"Kraft solicited from clients more than $1,000,000 under false pretenses, did not invest clients' funds as promised, and concealed from clients material facts, such as Kraft's use of clients' fund to pay WiseKraft Solutions operating expenses, Kraft's personal expenses, and clients whom Kraft had previously defrauded," his indictment reads in part.
In one scenario alleged in the indictment, Kraft had one of his clients transfer $150,000 to the FBO account with the understanding that the money would be used for legitimate investments.
Officials said in that scenario he embezzled $110,000 of the funds for operating and payroll accounts, as well as his own personal and business purposes.
Kraft was the executor for someone's estate, and when that person died, Kraft transferred about $115,000 from that person's trust account to WiseKraft's operating account, according to officials.
"These deposits into the WiseKraft Solutions' Operating Account and WiseKraft Solutions Reserve Account funded Wisekraft Solutions' business expenes, repayments to clients previously defrauded, and payments to Kraft," a portion of his indictment reads.
The Arc of York County said in its statement that the organization's services were not affected by the alleged activities. None of the alleged activities involved the agency, according to the statement.
"The Arc of York County will still conduct a thorough review of its financials to confirm this," the statement reads in part.
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Kraft remains free on $250,000 unsecured bail. York attorney Chris Ferro is representing him.
“We’re still in the process of reviewing the indictment and the allegations contained in that document," Ferro said Tuesday, July 31. "Our assessment is the issues are not as black and white as initially presented by the government, and that this is a complicated matter."
— Reach Christopher Dornblaser at firstname.lastname@example.org or on Twitter at @YDDornblaser.