Former professor says Durham man swindled her out of retirement savings
A Durham man was "a wolf in sheep's clothing," conning teachers and others into investing their retirement funds with him only to be left penniless, a state prosecutor told jurors Friday.Posted — Updated
Walter Ray Reinhardt, 64, faces more than 40 charges of securities fraud, common law forgery and common law uttering.
Reinhardt solicited investments from November 2005 to May 2009, asking people to put their money into a variety of businesses owned by a Richmond, Va., man, according to investigators. Investors were told they could earn 8 to 10 percent interest over four years.
Zesley Haislip Jr., senior enforcement attorney for the Securities Division of the North Carolina Secretary of State's Office, said in his opening statement that many of the investors were retired teachers who wound up losing their life savings. At least 16 people lost more than $1 million combined, he said.
Haislip said Reinhardt talked his way into faculty meetings at schools and would then persuade teachers to invest with him. He told at least one investor that former Gov. Jim Hunt and former University of North Carolina President C.D. Spangler were clients, the prosecutor said.
Johnea Kelly, a former head of the School of Nursing at North Carolina Central University, said she hired Reinhardt to do her taxes in 2006. He was personable and friendly, she said, and he eventually persuaded her to invest $267,000 with him.
Later, she checked on her account and found that all of the money was gone.
"I have to laugh now looking back. We used to pray together. He would call in his office manager after our meetings. We'd hold hands and pray," Kelly said. "Smart people do dumb things at times."
Reinhardt didn't tell clients he wasn't registered as an investment adviser and was banned from the securities business, Haislip said.
The National Association of Securities Dealers barred Reinhardt in 2001 from selling securities, and the state Securities Division issued a cease and desist order against him in 2007 for the unregistered sale of securities.
Defense attorney Kimberly Lott countered that Reinhardt had no reason to con clients, telling jurors that ethics was among his top priorities.
"What did he gain from doing this? He had money. He was a successful businessman. He was planted firmly in the community. He wouldn’t want to deceive his friends," Lott said in her opening statement.
Lott acknowledged that some documents were forged but said there was no proof that Reinhardt was responsible.
She told jurors that they would be presented with a lot of numbers during a complex trial and asked them to use their common sense.
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