SAN FRANCISCO (CBS SF) — A former San Francisco lawyer who became a self-proclaimed investment manager has been indicted in federal court in the city on charges of defrauding friends and relatives of $7 million.

Robert G. Tunnell, 72, of San Francisco, was indicted by a federal grand jury Thursday on seven counts of mail fraud, 13 counts of wire fraud and one count of money laundering.

Tunnell, a graduate of Dartmouth College and Harvard Law School, practiced law in California from 1971 to 2001. He resigned from the State Bar in 2001 amid charges that he had stolen $300,000 from his law firm, according to the indictment.

The indictment alleges that Tunnell “subsequently held himself out as a high successful investor” and persuaded friends and family members to let him manage their investments.

Instead, the indictment alleges, Tunnell operated a Ponzi scheme in which he lost $7 million entrusted to him between 2006 and his arrest June 23, 2011.

The indictment alleges Tunnell obtained a total of $10 million from investors during that time and used about $3 million to repay some of the investors, leaving his clients with a total loss of $7 million.

The document alleges he defrauded clients by failing to tell them he resigned from the State Bar amid charges of theft; falsely telling them he was putting their money in conservative, safe investments; falsely reporting phony gains; and failing to tell them he was using their money to repay other investors.

“During that time period,” the indictment alleges, “Tunnell consistently represented to his investors, among other things, that he was achieving steady gains in his investors’ accounts based on his conservative, low-risk investments.

“In fact, however, Tunnell used his investors’ money to engage in commodity trading and other risky trading, through which he lost approximately $7 million of his investors’ money,” the indictment said.

Thursday’s indictment replaces a criminal complaint filed under seal against Tunnell on June 22.

Following his June 23 arrest, he was released June 24 by U.S. Magistrate Elizabeth Laporte on $10 million bail, secured by a $2 million property bond posted by his son.

Tunnell was arraigned on the indictment before U.S. Magistrate Maria-Elena James Friday and ordered to appear before U.S. District Judge Charles Breyer on Aug. 10, according to U.S. Attorney Melinda Haag.

The mail and wire fraud counts each carry a potential sentence of up to 20 years in prison if Tunnell is convicted. The wire fraud count has a maximum 10-year sentence.

The indictment also seeks forfeiture of funds and property derived from any of the alleged crimes of which Tunnell is convicted.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments (2)
  1. m newton says:

    A never ending trail of madoff wanna – bees and the required sheep too clueless to manage their own finances .

    1. L Harter says:

      Don’e be a jerk it could happen to anyone.

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