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Regulators fine investment adviser

Adviser Frederick Allan Bieber, 67, subject of state, local probes into business practices


A Washington man who runs an insurance agency in St. Helens has been barred from operating as an investment adviser in his home state and was ordered to pay $25,000 related to “dishonest and unethical” business practices following the results of a state investigation, according to an order from the Washington Department of Financial Institutions Securities Division.

Two of the three clients referenced in the final order against the adviser, Frederick Allan Bieber, 67, of Ridgefield, Washington, live in Columbia County.

Now, some family members of Bieber’s former clients who live in Columbia County have come forward to accuse him of having manipulated relatives into agreeing to investments that included selling their homes to Bieber and loaning money to Bieber’s relatives — similar practices to those described in the Washington order issued in March.

The new allegations also prompted a St. Helens Police Department investigation into Bieber for suspicion of fraud and elderly abuse, though police officials have said the case has since been labeled inactive after one elderly man who police officials said was cooperating with the investigation died in early June of natural causes.

“Our investigation you would consider still open, but not active,” said Sgt. Phillip Edwards of the St. Helens Police Department. “And the reason for that is we have no living victims at this juncture.”

A representative from the Oregon Division of Finance and Corporate Securities said the agency is reviewing information it has received about Bieber, although no formal investigation has been launched.

Washington enforcement

Bieber has run Columbia Shores Financial Inc., a Washington-based business, since 1999, according to his statement to Washington regulators. According to the order, several outside financial service agencies, including KMS Financial based in Seattle and Pacific West Securities Inc., of Renton, Washington, employed Bieber’s investment adviser services through Columbia Shores Financial, and his business formerly had a physical presence at the St. Helens Community Federal Credit Union headquarters in St. Helens.

Results from the 2011 investigation show that Bieber engaged in several “prohibited activities,” including not disclosing when his clients made loans to his relatives, orchestrating private loans between his clients, and not providing notice to his employer firms when he received compensation from outside sources.

The order also states he misrepresented his business practices on an annual compliance questionnaire regarding the outside compensation he received.

Bieber disputes the claim and asserts that at no time did he receive compensation from the investments he set up for his clients.

“That’s not an assertion; that’s an absolute fact,” Bieber said when contacted about the Washington order. He also said ambiguities in the questionnaire contributed to his misstatements.

In one case referenced in the order, Bieber set up a loan in which a customer from Columbia City loaned money to Bieber’s immediate family members, including to his stepson, stepdaughter and daughter.

Bieber declined a hearing in response to the investigation’s findings, instead providing a written statement on Feb. 12 in which he argued he had an unblemished 32-year career and pleaded for mercy regarding any fines or costs that could be levied against him, according to the order.

“Since this process began in January of 2011 I have been distraught,” Bieber wrote in his statement. “Never having had someone allege wrongdoing on my part I was stricken with fear and disappointment when the original complaint was filed against me.”

Bieber reported in his statement that he had recently resigned as a securities salesperson and investment adviser, though he said he continues to work as an insurance agent.

Other complaints

The complaints against Bieber’s former practice as an investments adviser have not halted with the Washington order as other relatives of some of Bieber’s former clients have raised new concerns.

About 12 years ago, octogenarian Harvard Anderson wanted more spending cash, his son Walden Anderson explained. Harvard Anderson had free-and-clear ownership of his three-bedroom, two-bath riverfront Columbia City home, which he ultimately sold to Bieber in a reverse mortgage-style transaction in 2002 for $113,000, according to transaction records.

Bieber then agreed to pay Harvard Anderson $677.49 per month toward the home, according to records provided to the Spotlight. In exchange, Harvard Anderson paid Bieber $475 per month in rent, netting Harvard Anderson $202.49 per month. Harvard Anderson also had to maintain renter’s insurance on the home, and pay $2.49 to Bieber as a filing fee.

When Harvard Anderson died in 2010, at the age of 94, the house and property transferred to Bieber, according to the contract.

“It ended up me and my sister had to buy the house from Bieber,” Walden Anderson said. After Harvard Anderson died, Walden Anderson said he and his sister, Denise Karsteatter, agreed to pay Bieber $27,000 in equity Bieber claimed he had in the house, after initially rejecting Bieber’s asking price of $175,000 and, later, Bieber’s counteroffer of $50,000 worth of equity he initially claimed he had in the house, according to records provided by Walden Anderson.

Walden Anderson said he and Karsteatter met resistance any time they attempted to access their father’s money when his health failed in 2008 and he had to move in with Karsteatter at her Milwaukie home. He said their father told them Bieber had encouraged him not to discuss his deals with his children.

“He said Frederick Bieber said not to say anything about it and to swear him to secrecy,” Walden Anderson said.

Bieber said he could not recall how much he received for the house sale or any proposals he made on it, and denied any claim that he advised his clients not to discuss business deals with relatives.

“Absolutely not,” Bieber said.

In another case referenced in an investigative record, Bieber is alleged to have orchestrated loans in 2006 of several hundred thousand dollars between an 82-year-old private lender, who has since died, and Bieber’s immediate relatives. In that case, two of Bieber’s relatives declared bankruptcy after taking out the loans.

Bieber said as recently as three weeks ago he extended an offer to compensate the estate of the private lender for the money owed.

“I just hope that, out of fairness to me, you will stress throughout this thing that this was a competent lender and I never received a penny of personal compensation or benefit from anybody,” he told the Spotlight.

Bieber also said he had a clean record prior to the Washington decision and denied claims that he specifically approached elderly clients for such deals.

Bieber operated Columbia Shores Financial out of the St. Helens Federal Credit Union office until February 2013. His exit occurred soon after a management change at the credit union. He reported in his statement to Washington regulators that the credit union had agreed to purchase Columbia Shores Financial with a close date of January 2013, before backing out and canceling the use of his services as an investment consultant.

A spokeswoman for the credit union said there never was an agreement to purchase Columbia Shores Financial.

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