Local family claims fleecing by advisor; Richmond firm implicated

By MICHAEL SCHWARTZ | Richmond BizSense | December 14, 2016

See Original Article Here.

The widow of a wealthy local investment banker is suing a Charlottesville businessman who she claims stole much of her family’s $7 million fortune in an episode that is allegedly being investigated by the FBI and has entangled a Richmond financial firm.

Lynne Kinder, whose husband Carr Lanier “Trey” Kinder died in 2005, has accused Victor Dandridge III, a former partner at Richmond-based Thompson Davis & Co., of pilfering the money left to her and her daughters.

Filed Nov. 17 in Richmond Circuit Court, the suit states that Dandridge was struggling with his own financial dealings and has admitted to stealing and mismanaging Kinder’s money in a scam that diminished her assets from $6.9 million to less than $2 million. It claims a criminal investigation was launched by the FBI in October related to “the theft of Mrs. Kinder’s monies.”

“To buoy the struggling businesses and simply to line his own pockets and those of his family, during the period of 2007 to 2016, (Dandridge III) stole and squandered millions of dollars of Kinder monies,” the case claims.

“Mrs. Kinder brings this action to reclaim for her daughters the bright financial future that her late husband and she worked so hard to provide.”

FBI spokesman Michael Schuler said the bureau couldn’t confirm or deny the existence of any investigation related to the allegations in the Kinder case.

Dandridge is represented by Charlottesville attorney Francis Lawrence. Messages left for Lawrence were not returned by press time.

In addition to Dandridge, the suit also lobs allegations at a dozen other defendants, including Thompson Davis – where Dandridge worked from 2012 until this summer – its founder and CEO Bill Davis, its current and former compliance officers, the firm’s in-house hedge fund, and Dandridge’s wife.

Also dragged into the 64-page lawsuit are Virginia National Bank, Dandridge’s father, Charlottesville financial advisor Richard L. Booth Jr. and various business entities.

The relationship between the late Mr. Kinder and Dandridge goes back to their youth in Roanoke. The two were childhood friends and Dandridge was a groomsman at the Kinders’ wedding and spoke at Kinder’s funeral.

The late Mr. Kinder attended Washington & Lee University and earned a law degree from UVA.

He worked as an associate at Hunton & Williams before going into investment banking in 1997 – a career change that landed him in Richmond at Wheat, First Securities (which eventually became part of First Union), and then Wells Fargo.

He was 41 when he died of a heart attack while riding his bike, according to the suit, leaving his wife and daughters nearly $7 million through an IRA, stock, stock options and life insurance proceeds.

The case alleges that Dandridge, who worked in Richmond for First Union in the late 1980s, contacted the widowed Kinder days after her husband’s death, claiming he ‘owed it to Trey’ to look after her and her two young daughters and offered to manage the family’s financial affairs.

Despite allegedly not being registered as an investment advisor with either FINRA or the SEC, Dandridge persisted in his pitch, the case claims, and Kinder – who attended Randolph-Macon Woman’s College in Lynchburg – eventually agreed to transfer her financial assets to Dandrige’s care in February 2006.

Six years later, Dandridge became a partner at Thompson Davis, earning certain financial advisor certifications in the process.

While the case admits Dandridge brought only a fraction of Kinder’s assets with him to Thompson Davis, it claims Davis and current and former compliance officers Kevin Rutherford and Walter Young knew Dandridge was managing money for clients without being registered or licensed with FINRA or the SEC but “took a head in the sand approach” to his past and then-current activities.

It claims Thompson Davis should have seen red flags raised by Dandridge’s actions during his time at the firm, and that the company is “vicariously liable” for its employees’ alleged wrongful conduct.

Thompson Davis, through attorney Bill Bayliss of Williams Mullen, said in a statement it denies the allegations.

“The Thompson Davis defendants, including Bill Davis, Walter Young, Kevin Rutherford and Seven Hills deny any and all allegations of wrong doing on their behalf and their records reflect that they had only a small amount of Lynne Kinder’s money under management and Thompson Davis never took custody of any of these funds while under management at Thompson Davis as these assets were held at Bank of New York Mellon-Pershing,” the statement reads. “Their records further reflect that they properly managed the funds entrusted to them by Lynne Kinder and when the accounts were closed this summer and the funds were returned to Lynne Kinder the accounts reflected a positive return for their client.”

Dandridge left Thompson Davis shortly after Kinder’s attorney began requesting documents from Dandridge and the firm.

Over the course of Dandridge’s management of Kinder’s finances, he allegedly used Kinder’s money to prop up his own businesses and facilitate various real estate deals in Charlottesville, including one involving a nearly 9,000-square-foot home there.

Dandridge allegedly used Kinder’s money to make payments on a $2.7 million line of credit, which he borrowed from Virginia National Bank with the help of collateral from his father.

The case claims Dandridge used Kinder’s money to take out a loan on Kinder’s own home and then used her money to pay back the loan.

It claims Dandridge and his wife, Ann Claiborne Dandridge – both of whom have economics degrees from UVA – used Kinder’s money to settle various business lawsuits and to pay a lease in Midlothian and their legal fees.

It claims Mrs. Dandridge knew of the ill-gotten funds.

Kinder, who lives in the City of Richmond, alleges 13 counts, including breach of fiduciary duty, breach of contract, fraud, negligence and unjust enrichment against Dandridge, Thompson Davis, Davis, Rutherford, Young and Seven Hills.

She accuses Dandridge, his wife, their lighting company and Thompson Davis of conversion, a legal term for theft.

The claims against Booth, Virginia National Bank and Dandridge’s father relate to fraudulent conveyances, seeking to recoup money that may have been transferred under fraudulent circumstances.

She’s seeking combined damages of more than $9 million and has asked for a jury trial.

Kinder is represented in the case by Richmond attorney Mark Krudys, a former federal prosecutor. Krudys had no comment beyond the pleading.