Investment News, December 4, 2008, (Bruce Kelly)

ING Financial Partners last month reached a settlement with 38 defrauded investors to return $2.9 million stolen by two former brokers, both of whom are now in jail.

The two representatives, Nevin Gillette and Richard Wells, ran two long-running Ponzi schemes, according to the attorneys who represented the clients, John Burke of Higgins and Burke PC in St. Charles, Ill., and Andrew Stoltmann at an eponymous firm in Chicago.

Mr. Gillette had been sentenced in September 2007 to eleven years in federal prison for defrauding his clients, while Mr. Wells was sentenced in February to three years and five months for the fraud.

Because the clients who settled with ING Financial Partners Inc. of Des Moines, Iowa, did not have account agreements with the firm, they sued the firm in Whiteside (Ill.) County Circuit Court, Stoltmann said in a statement.

The settlements with ING that related to Mr. Gillette totaled $2.6 million on behalf of 31 clients.

ING settled cases involving Mr. Wells for $270,000 on behalf of seven clients.

Mr. Gillette, while working with ING, told investors they were putting their money into safe investments called “guaranteed investment contracts” or “trust accounts,” the attorneys said in a statement.

Instead, Mr. Gillette used the funds for his personal use, including a new home, fishing and hunting equipment, paintings, suits and jewelry.

Likewise, Mr. Wells used the funds for his own benefit, the attorneys said.

Most of the clients have further claims against others in the matter, including broker-dealers where the two worked previously or concurrently with ING. ING Financial Partners is one of the broker-dealers in the ING Advisors Network.

A spokesman for ING Financial Partners declined to comment.