State prosecutors on Tuesday filed charges against a 34-year-old Idaho man accused of violating multiple securities and insurance laws in handling money for residents of Libby and Troy.
Kip Hartman is charged with conducting insurance transactions and acting as an investment adviser without the proper licensure; securities fraud, and exploitation of an older person. If convicted, Hartman could be sentenced to a maximum 40 years in prison.
Hartman has pleaded not guilty to the charges, his attorney told the Missoulian on Wednesday.
The website for Hartman's business, Kootenai Valley Tax and Wealth Management, states he was born and raised in Bonners Ferry, Idaho, where he's done business for the last 10 years. In 2014, he told The Western News in Libby he opened a branch there earlier that year.
"Things are going well, great really," he told the newspaper.
Last month, a 69-year-old Troy woman told investigators with the Montana State Auditor, Commissioner of Securities and Insurance office of her experience with Hartman. She described how Hartman had instructed her to sell her father's annuity, which would have earned her an inheritance of over $2 million dollars, and to purchase an annuity from Hartman instead, according to charging documents.
Prosecutors allege the woman had come into Hartman's financial services amid her own financial troubles, and had learned to trust his advice. So she followed his advice in transferring the annuity. During that process she had no access to the funds, so Hartman reportedly loaned her $2,500 per month; those payments eventually totaled $62,500, but by the time the entire process was through, she had paid Hartman more than $734,000, not including the penalties and commissions from transferring her father's annuity.
Charging documents list five other people who reported selling their investment portfolios and using the proceeds to purchase annuities with Hartman, at his recommendation. Hartman earned approximately $294,400 in commission from these recommendations and annuity sales, prosecutors allege.
While he was not licensed in the state to conduct such business, his wife was licensed and it was her signature that appeared on the relevant paperwork, prosecutors allege. The victims identified by the state auditor's office said they had never met his wife, or had minimal contact with her.
Calls to Hartman's offices in Bonners Ferry and Troy were not returned Tuesday.
Special Assistant Attorneys General Brett Olin and Janell Williams have been deputized to prosecute the case in Lincoln County.