CEO is accused of fraud

A Newport Beach financial advisor has been accused of ripping off two people, including a former intern from his company, out of hundreds of thousands of dollars for personal use.

According to a complaint filed Monday in federal court by the Securities and Exchange Commission, Gary R. Headding, 41, stole more than $274,000 from two of his clients at Envision Direct LLC, where he is president and chief executive.

In April 2007, Headding was the only financial investor left at the company, which months earlier had more than 50 clients and $40 million in funds. His two principal partners left, and by May 2009, only three clients and less than $1 million in funds were left.

The government contends that between April 2007 and May 2008 Headding misappropriated much of his clients’ money.

Attempts to reach Headding were unsuccessful Tuesday.

According to the SEC, one of Headding’s victims was a woman who worked at Envision Direct as an intern.

She had no investment experience and asked Headding to manage her only significant asset: $470,000 she received from her mother’s life insurance policy.

SEC officials claim that in just over a year, Headding moved more than $243,000 of that money out of her account in four transactions, using it for personal expenses or to fill up his own retirement account.

The woman had trusted Headding with her online account and its password for investments, officials said.

A separate victim, a friend of Headding’s family, had almost all of her investment money — about $31,000 — withdrawn too, according to the government complaint.

He’s also accused of overcharging Envision Direct clients through inflated advisory fees, which authorities said were supposed to be no more than 2%.

Instead, the government claims, he charged one client nearly 13% and others almost as much, totaling more than $47,000.

The government is seeking a permanent injunction against Headding, and to recover some of the money and give him financial penalties.