ATTORNEY NEWSLETTER
Insurance Agent Sentenced For Investment Fraud Targeting Seniors
Misrepresentations About Highly Speculative Investments
20-70% Of Money Received Pocketed As Fees
Unscrupulous insurance agents, financial advisors, brokers and investment promoters seize on older investors’ anxiety about inflation and soaring health care costs to offer investments that promise above-market returns in the years to come. Older persons may liquidate their retirement savings based on false promises for the “new opportunities” being promoted. Victims of fraudulent investment schemes may end up losing everything. When perpetrated against older investors, such schemes violate federal and State securities laws, wire and mail fraud laws, theft, and financial elder abuse, itself an additional crime under California law. See 18 U.S.C. § 1341 (elements of mail fraud); 18 U.S.C. § 1343 (elements of wire fraud); Cal. Corp. Code §§ 25401, 25540 and 25541 (fraud in securities offerings); Penal Code § 487 (grand theft); Penal Code § 368 (crime of financial elder abuse) and Cal. Welf. & Inst. Code § 15610.30 (definition of financial elder abuse for civil liability). Evans Law Firm, Inc. represents victims of financial elder abuse in Los Angeles and throughout the State of California. If you have, call our lawyers today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
Insurance Agent Sentenced To Five Years In Prison For Defrauding Seniors[1]
An insurance agent has recently been sentenced to five years in prison for orchestrating an investment fraud scheme that targeted elderly clients. According to court documents, the defendant made material misrepresentations and omissions to sell “illiquid, highly speculative investment vehicles” from January 2011 through August 2017. These investments were controlled by an individual who, last September, was sentenced to 35 years in prison for running a nationwide investment fraud scheme led to more than $25 million in losses for more than 300 victims – most of whom are elderly. The insurance agent’s own participation in the scheme caused victims to lose over $3 million in the scheme according to the government. Prosecutors said that due to the fraudulent misrepresentations made by the insurance agent defendant when feeding clients into this nationwide scheme, the unsuspecting investors cashed out of 401(k) and other retirement accounts to purchase the investments. The victims were unaware that between 20% and 70% of their funds would be pocketed by the insurance agent and other conspirators in the form of “fees.”
Warning Signs of Potentially Fraudulent Schemes
The reported scheme illustrates several “red flags” common to many fraudulent investment schemes:
- Qualifications of sellers. In the reported sentencing, an insurance agent was promoting a complicated investment that had nothing to do with insurance. We have seen similar instances where insurance agents promote unregistered securities or notes in businesses that have nothing to do with insurance. Ask yourself if the person suggesting an investment to you really knows what he or she is talking about.
- High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.
- Overly consistent/guaranteed returns. Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions, or any investment that promises a “guaranteed” return or amount of income.
Contact Us
If you or a loved one has been the victim of financial elder abuse by an insurance agent, stock broker, investment advisor, promoter or other person in Los Angeles or elsewhere in California contact Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267).
[1] Evans Law Firm, Inc. was not involved in the case in any way.
