Barbara Kovalev first met Rick Siskey two decades ago after she won a legal settlement related to the birth of her severely disabled daughter.
She and her then-husband were looking for a financial adviser to help manage the money they were overseeing in their daughter’s trust account. Although they weren’t big investors, Siskey made them feel important at their first meeting in a SouthPark office building.
“You felt like a big shot,” she said. “He had the gift of gab....A smooth talker. Very confident.”
Over the years, Kovalev trusted Siskey was properly managing her money. That’s why it came as a shock last December when she heard that he had taken his own life shortly after fraud allegations had surfaced.
“I cried,” Kovalev recalls. “I grieved.”
That grief, however, soon turned to anger and disbelief when, like dozens of other investors, she discovered she could no longer access the money she had entrusted to Siskey.
An FBI affidavit unsealed in January alleges that Siskey operated a Ponzi scheme for years through an investment fund called TSI Holdings. Now his long-time investors are scrambling to find out what happened to money they had in that fund, as well as other Siskey-related companies.
In TSI alone, more than 100 investors are out more than $19 million.
Some of the investors were unsophisticated or elderly, placing retirement accounts, pension funds and insurance payouts with Siskey, according to the affidavit. Some worked with him for years, visited his home and enjoyed perks such as tickets to Carolina Panthers games, making the betrayal even harder to comprehend.
In an effort to reclaim lost money, attorneys have filed petitions pushing four Siskey companies into bankruptcy. A court-appointed trustee is working to identify assets and potential claims.
Authorities have not suggested that anyone else was involved with the alleged Ponzi scheme. Siskey’s widow, Diane, has pledged to set aside $37.5 million of the $46.94 million in life insurance proceeds from her husband’s death for investors.
Attorney Charles Monnett III, who is working with some of the affected investors, says that may not be enough.
“There is still some uncertainty,” said Monnett, who also has a close family member who invested with Siskey. “Our priority is trying to get a handle on how much is potentially owed. I’m pretty confident it will exceed the $37.5 million, but don’t have a definitive number at this point.”
‘We just connected’
Siskey and his wife moved to Charlotte in 1985, and he soon landed a position at Consolidated Planning, where he built a client list from scratch.
By 1995, he had made enough money to make a sizable donation that put his family’s name on the YMCA in Matthews. Around 2000, he started Wall Street Capitol, a firm associated with the MetLife insurance company that made its home in a prominent SouthPark office on Sharon Road. He also invested in small companies and real estate on the side.
Mike Aldridge, who owns an automotive machine shop in Monroe, first started working with Siskey in the late 1980s, after a referral from a friend. He invested savings with him, set up retirement plans and took out insurance through him.
“We just connected,” Aldridge, now 64, said. “I trusted him.”
Over the years, he would send Siskey money to put into a variety of investments, including real estate and a company called WSC Holdings.
Siskey formed WSC Holdings in 2001 for “rental real estate” purposes and was its manager, according to North Carolina Secretary of State records. Siskey moved money back and forth between WSC and a personal account, with the personal account gaining $2.2 million, the FBI affidavit says.
Aldridge said investing in WSC Holdings was as easy as putting money in a bank account, with Siskey initially promising an annual return of 10 percent. He received quarterly summary sheets that showed his money growing, although the returns dipped when the economy turned in 2008.
We just connected. I trusted him.
Mike Aldridge, who owns an automotive machine shop in Monroe and invested savings with Rick Siskey
Investing with Siskey also came with other benefits. Aldridge said he visited the “man cave” at Siskey’s Sharon Road mansion in SouthPark, which also boasted a fleet of luxury cars. He also took advantage of tickets to NASCAR races and Panthers games.
Aldridge rarely pulled money out of his accounts. But he did make a withdrawal to buy a small beach condo a few years ago with no problems, he said.
Over the years, there were some hiccups, but they didn’t cause him major concern at the time. In one instance, at Siskey’s suggestion, Aldridge put $100,000 in a commodities investment that quickly lost value. When he asked Siskey about it, the financial adviser offered to pay him back in full. He compensated Aldridge by putting the money in another one of his accounts.
“He didn’t hand me any money,” Aldridge said.
In 2004, Siskey was banned from the securities industry for two years because he participated in private securities transactions without giving proper notice to his employer. But Aldridge said he wasn’t aware of that at the time.
When he first heard that Siskey was being investigated last year, Aldridge said, he thought it was some kind of technicality and that Siskey would be able to explain it away.
Then he got the call on Dec. 28 from his brother: Siskey had taken his own life.
“Holy cow,” Aldridge recalled thinking. “He didn’t just have something he couldn’t explain. He was guilty of something.”
Aldridge is now one of the investors who joined the petitions to push three Siskey-affiliated companies – WSC Holdings, SouthPark Partners and Sharon Road Properties – into bankruptcy. Aldridge, along with wife, Kathy, and his machine shop, had $600,000 invested in the three companies, according to court documents. That was just a portion of what the couple had invested with Siskey.
Aldridge hopes that the insurance money will be enough to repay most investors, especially those less fortunate than himself.
“I’m aware of some older people who got the biggest chunk of their money with him,” he said. “They get the sympathy, not me.”
‘My biggest fear’
During the delivery in 1987, Kovalev said her daughter, Laura, suffered a birth injury that led to her being severely mentally disabled. Today, at age 30, Laura suffers from cerebral palsy and epilepsy. She uses a wheelchair, can’t talk and needs help eating. She has a full-time care provider.
Kovalev and her then-husband, Walter Smith, sued the doctor and hospital and received an undisclosed monetary settlement in the late 1990s. That’s when she and her husband turned to Siskey, whom she followed from Consolidated Planning to Wall Street Capitol.
Over the years, Siskey moved their money in and out of various accounts. At one point, the money was shifted to an outside company called Curian Capital, but in 2015 that firm said it was getting out of the money-management business.
He just schmoozed us like old-time buds.
Barbara Kovalev, on investing with Rick Siskey
So in January 2016, Kovalev and her ex-husband met with Siskey at his SouthPark office building. Gary Hammond, a Wall Street Capitol financial adviser who had also worked with Kovalev, joined them.
They sat in the wood-paneled board room that is notable for its huge saltwater fish tank and its view of the Charlotte skyline, eating salads brought up from Zebra, the French restaurant downstairs at the time. Her ex-husband mentioned Siskey’s luxury cars, Kovaelev recalls, and he was soon showing off photos of the vehicles.
Siskey did most of the talking, suggesting they put their money in WSC Holdings, the Siskey-managed company, Kovalev said. She and her ex-husband agreed to make the investment, which Siskey said would pay 5 percent interest. Kovalev said she didn’t realize the fund was run by Siskey.
“He didn’t give us options,” she says. “He just schmoozed us like old-time buds. I have to take responsibility for my own stupidity.”
James Wyatt, an attorney representing Hammond, said his client met with Kovalev to “facilitate the closing of her Curian account and for that purpose only,” adding: “He had no role in Rick Siskey’s investments or with regard to any investments made in WSC Holdings.”
At the time, Hammond was a registered representative of MetLife, working under the Wall Street Capitol name, Wyatt said. Siskey, however, had long since left Wall Street Capitol at the time of the meeting, he said. MetLife, which sold its brokerage arm to MassMutual in July 2016, did not immediately respond to a request for comment.
Kovalev, 57, says she was not aware that Siskey had left Wall Street Capitol. Siskey still worked on the same floor of the SouthPark office building that bears a prominent Wall Street Capitol sign.
At Curian, Kovalev could move her money around by logging in online. Once her funds were in WSC Holdings, she had to call Siskey’s assistant, Denise Rhodes, when she needed to take out money. Rhodes is listed as Kovalev’s “representative” on her WSC Holdings account statement. Claire Rauscher, an attorney representing Rhodes, wouldn’t comment.
After Siskey’s death, Kovalev said she called Hammond, and he referred her to Diane Siskey’s attorney, Thomas Walker. She left two voicemails with Walker but never heard back.
“We understand that this is an extremely frustrating time for the investors,” Walker told the Observer. “We are working as quickly as possible to bring resolution to their concerns.”
Laura’s care is mostly covered by Medicaid, but Kovalev worries the money won’t be available if needed.
“If she needs something like a new wheelchair, we don’t have access to the money,” she said. “My biggest fear is that it is gone.”
Attorney Joe Grier, who is the court-appointed trustee in the Siskey bankruptcy case, has launched a web site where Siskey investors can learn more about the case and provide contact information. The web site is https://tsiholdings.wordpress.com/.