Barbara “Bobbee” Kellner’s top-shelf life was built on a lie. She paid for her Prada shoes and dinners at Lucky’s not with smart investments, as she told everyone, but with money stolen from friends.
One of those friends was Lisa Sands. Last week in Santa Barbara Superior Court, after years of fighting, Sands won a $700,000 judgment against the investment companies owned by Kellner and her late husband, Paul Welterlen, who ran a $4.7 million Ponzi scheme that ended in broken hearts, a disappearance to Nicaragua, and suicide.
Sands and Kellner met at a yoga class in 2010. A few weeks later, Kellner introduced Sands to Welterlen, a charismatic TV actor turned hedge-fund manager. He talked Sands into investing her $300,000 life savings through Welterlen-Kellner Inc.; he promised high returns with minimal risk. Welterlen delivered for three years until he told Sands and his other dozen investors — including his own mother and niece — that the account had “blown up.” It wasn’t his fault, he said. The market had been unkind.
In reality, Welterlen and Kellner were spending their investors’ money on vacations around the world, a house on the Riviera, and new cars. Tips from victims led police to the couple’s Laguna Street office, where detectives found forged bank statements and falsified quarterly reports. In June 2016, just days before he was going to be charged with grand theft and money laundering, Welterlen stepped in front of a train on Butterfly Lane. Kellner received $5 million in life insurance payouts; Welterlen had purchased the policy many years earlier, and it had matured to cover suicide.
Kellner has always maintained ignorance of her husband’s crimes. She said she was devastated by his death and had no knowledge of the scam. The victims never believed her. The Independent spoke with seven of them who remain convinced of Kellner’s guilt. Soon after Welterlen’s death, she fled to Nicaragua, where the couple had purchased 13 acres of developable beachfront property with investors’ funds and installed their son, Towe Wang, as manager.
The property is still actively soliciting new investors through its website, TaraVela.com, which outlines plans to construct a 16-room luxury hotel. “This is the chance to catch the first wave of high-end development in Nicaragua and to help create a new style and a new private resort,” it states. Kellner is listed as the company’s “guest services and aesthetics manager.” Towe is its chief operations officer. His Facebook page says he lives in the nearby town of San Juan del Sur.
While criminal prosecutors could never prove Kellner was an active participant in Welterlen’s Ponzi scheme, in civil court, where the burden of proof is lower, Sands’s attorney John J. Thyne III convinced Judge Donna Geck that the couple’s companies were liable for Sands’s losses. Among other pieces of evidence, Thyne cited pay stubs that showed Kellner had received $3,500 a month to oversee the Welterlen-Kellner fund, and he highlighted her signatures on corporate formation documents. Kellner told police she knew nothing about the fund’s existence.
“My next steps will be to pierce the corporate veil in a motion to hold Barbara Kellner personally liable for the judgments against the businesses,” Thyne said. He’s also considering going after Kellner’s attorney Michael Amir, alleging Amir helped further the fraud when he lied to investors on Welterlen and Kellner’s behalf that their funds were lost in market trading.
Amir, based in Los Angeles, emphasized last week’s court judgment was against the companies, not Kellner. “Ms. Kellner is not guilty of any of the egregious claims made against her,” he said. Amir denied “any involvement whatsoever in the original investment or loss of that investment.”
Sands publicly thanked Thyne for his work on the case. “John believed in me and my case and he has done a great job getting justice for me,” she said in a prepared statement. “He was playing chess while Bobbee’s attorneys were playing checkers.”
Five other victims sued and settled with the companies last year for undisclosed sums.