Elizabeth G. Williams, age 80, The Villages, FL
Mrs. Williams, a widow for 19 years and permanent resident of the Villages since 2002, worked for thirty two years to secure her financial future. During her career, Mrs. Williams began investing with her employer who matched a portion of her investment. Mrs. Williams’ original annuity purchases were made when she rolled over her retirement IRA in the 1990s.
During the past several years, Mrs. Williams attended a number of investment seminars. As a result of her attendance at these seminars several agents advised her to wait until the accounts matured before making any changes. Mrs. Williams did not change her investments until May, 2007, after attending a “risk-free” investment seminar.
This seminar emphasized “no risk,” impressing Mrs. Williams, as it was important to her not to risk or lose any of the money she worked many years to secure. As a result of the promises made at the seminar, Mrs. Williams made a follow-up appointment with the agent. Upon confirming her appointment, the agent asked Mrs. Williams to bring her life insurance policies, income tax returns, investment statements and long-term-care policies. During the meeting, Mrs. Williams was introduced to another agent.
Mrs. Williams purchased a flexible premium indexed deferred annuity with AmerUs Life Insurance Company from the agents. Mrs. Williams does not recall signing the application and questions whether or not the signature is hers. Mrs. Williams states the agents encouraged her to invest in the annuity, knowing she would suffer significant surrender charges. Mrs. Williams states she was unaware that her existing investments were maturing soon. She says would have waited for their maturity before investing the money elsewhere.
As a result of following the advice provided by the agents, Mrs. Williams lost $6,842.64 in surrender charges. Upon learning about the surrender charges, Mrs. Williams contacted Aviva, the parent company for AmerUs, who offered a refund of her initial premium purchased less surrender charges.
After filing a complaint with the Department of Financial Services, the agents allegedly requested Mrs. Williams to write a letter to the department, rescinding the complaint. Additionally, the agents requested that Mrs. Williams provide them the opportunity to review and approve the letter before sending it to the department. The agents indicated that if they approved the letter they would reimburse the surrender charges she incurred. The agents made a return appointment for Mrs. Williams. When she returned, both agents questioned her about retracting her complaint, once again asking for a letter of retraction in exchange for her surrender charges.
Mrs. Williams did not write a letter of retraction, however she received a check from one of the agents for $10,263.71. AmeriUs has refunded Mrs. Williams for the full amount of the annuities purchased.
Bernice Rosenberg, Age 84 & Edward Bogan, Age 84, Delray Beach, FL
In October 2004, Edward Bogan, attended a seminar in which Eric Brown was discussing investments. A couple of days after the seminar, Edward made arrangements to meet with Agent Brown. At the meeting, Agent Brown cast aspersions on Edward’s current insurance agent, and he falsely advised Edward that Allmerica, the company from which Edward had earlier purchased and was holding annuity contracts with was having financial difficulties.
Brown also told Edward that if he transferred his Allmerica investment to Jackson National Insurance Company, he would be provided with a “bonus.” When Edward told Agent Brown that he was concerned about suffering $33,000 in surrender penalties, Agent Brown assured Edward “not to worry about this” because the return on the Jackson National investment during the first year would offset all but $3,000 of the penalties to be incurred.
Edward Bogan owned another annuity issued by Allianz. Agent Brown falsely advised Edward that he would have “to live to be 90 years old to get any benefits out of that annuity.” Agent Brown placed three to six blank papers in front of Bernice and Edward and requested that they sign the blank forms to transfer the funds and purchase new annuities. In addition to the foregoing annuities, Edward had purchased a General Electric annuity for $94,000 in 2002 and had given it to his son, Bruce Bogan. Agent Brown told Edward that it would be okay to sign his son’s name to a blank form, although Edward did not have power of attorney to act on his son’s behalf.
Following effectuation of the annuity transactions, neither Edward nor Bernice received a “bonus” and the Jackson National annuity did not provide the death benefits, low maintenance costs, and gains Brown had promised. Agent Brown intentionally misled Edward and Bernice about the financial conditions of Allmerica, the lack of valuable benefits and excessive charges in the Allmerica and Allianz annuities in order to convince them to liquidate these holdings in favor of purchasing Jackson National annuities, so that he might earn commissions on these transactions.
In February of 2006, the Department of Financial Services permanently revoked the insurance licenses of Eric James Brown and removed him from the insurance industry. Brown was also ordered to pay a total of $151,026 to the victims he defrauded. Brown failed to make restitution to the victims as stipulated.
In April of 2008, The Bureau of Investigation, Division of Agent and Agency Services conducted a follow up investigation to ensure Eric Brown was abiding by the revocation order. As a result of the investigation, The Department of Financial Services, Division of Insurance Fraud arrested Eric James Brown on three counts of selling insurance without a license and for violating a departmental order.
Irene Putnam, Age 85 & Louis Bruno, Age 93 Boynton Beach, FL
On or about March of 2005, Louis Bruno’s son was pursuing court proceedings to be appointed his father’s guardian. Louis, who was 90 years old at the time, was living with Irene Putnam, his companion of 15 years. Due to his advanced age and lack of short-term memory, Louis was unable to manage his own finances; instead he relied on Irene who had power of attorney.
Irene told agent Joseph Ripa that she needed an investment through which she could safely keep some money for a very short period of time. During this visit, Irene further explained to Agent Ripa that she needed to have full access to her money whenever she needed it. Agent Ripa falsely represented to Irene, who was 82 years of age, that an annuity investment was appropriate to meet these investment objectives. With these assurances, Agent Ripa convinced Irene to purchase an annuity.
Agent Ripa misrepresented the terms and conditions of this investment by failing to disclose to Irene that the investment he described was actually an equity-indexed deferred annuity, carrying ten years of surrender charges as high as twelve percent.
In direct contradiction to Irene’s stated objective of having full access to her money whenever she needed it, and without Irene and Louis’ full understanding of the terms and conditions of the investment, Agent Ripa placed Irene’s funds in an annuity whereby access to her money would be limited for the following ten years, or until Irene was 92 years of age. This single transaction generated approximately $1,800.00 in commissions for Agent Ripa.
In June of 2007, the Department of Financial Services permanently revoked the insurance licenses of Joseph Ripa and fined him $40,000.
Virginia LaValley, Age 78 - Represented by her son, Kenneth LaValley Boynton Beach, FL
In September of 2005, Agent Ripa convinced Virginia LaValley, a single senior who was 75 years of age and in an obvious state of declining mental capacity, to surrender six existing annuities were purchased between 1993 and 1997. Ripa then sold her two equity-indexed deferred annuities in the amounts of $19,079.49 and $19,500.00.
The new annuities were subject to 15 years of surrender charges as high as 19%, limiting Virginia’s ability to have full access to her funds for another 15 years or until she reached the age of 90. Agent Ripa falsely represented that Ms. LaValley would receive a “guaranteed” annual rate of return of 7% as a way to convince her to replace her current annuities.
The annuities Virginia surrendered at the recommendation of Agent Ripa allowed full access of her funds without penalty. Upon receiving a congratulatory letter from the insurance company issuing the new annuities congratulating Virginia immediately wrote a note on the letter to please cancel the annuities and mailed it to the insurance company.
The insurance company then informed Agent Ripa of Virginia’s desire to cancel the annuities. Agent Ripa visited Virginia with a prepared letter for her signature rescinding her desire to cancel. The agent would have lost his commission of over $4,100.00 had the cancellation taken place. Virginia signed this letter and it was sent to the insurance company.
In June of 2007, the Department of Financial Services permanently revoked the insurance licenses of Joseph Ripa and fined him $40,000.
Alice A. Bouchard, age 94, New Port Richey, FLorida
Alice and her husband had purchased annuities since 1994 and had nine of them with American Investors Life.
In 1996, the Bouchards heard an agent, Bijan Razdar, discussing annuities on the radio which created enough interest that they decided to attend one of his seminars. After attending the seminar, they decided not to do business with him at that time.
However, approximately one year later, Razdar called them and arranged an appointment. After the meeting they decided to do business with Razdar and purchased two deferred annuities for approximately $65,000.
Alice's husband handled the investments until he passed away in 1998. Following his death, Razdar began moving the annuities from one company to another or “twisting” polices in order to generate commissions.
restricted her access to funds from the annuity for more than 5 years nor did she want to pay any surrender charges. Ignoring Alice, the agent gave her blank forms to sign that she didn’t understand. She “trusted” the agent was working on her behalf.
Over a period of six years, Razdar sold Alice and her husband approximately 30 annuities by convincing them to surrender old ones to buy new ones and suffered significant monetary penalties as a result.
Alice paid over $20,000 in surrender charges, lost ownership of nearly $293,000 through multiple “twisting” of annuity policies, and was left with policies that had a surrender period of 14 years. The agent received over $140,000 in commissions.
Razdar’s license was permanently revoked by the Department of Financial Services in early 2006.
Bonnie Madden, age 81, Port Richey, Florida
In 2005 and 2006, Bonnie Madden, at the advice of agent Randolph H. Kahl-Winter, liquidated her existing investments to fund the purchase of two annuities with ten and fifteen year surrender periods from Allianz.
In 2007, Kahl-Winter engaged in a practice known as “twisting” where an agent knowingly makes misleading or incomplete representations with respect to any insurance policies for the purpose of inducing any person to surrender, borrow on or convert any insurance policy to another policy with another insurer.
Kahl-Winter converted Bonnie’s two annuities into one life insurance policy with a different company, American National. Kahl-Winter forged Ms. Madden's name to a Financial Statement Questionnaire, Life Insurance Illustration, and Modification of Life Insurance or Annuity Application. These documents were part of the application for a life insurance policy with a face value of $1.75 million which was issued based on false information provided by the agent. Moreover, Agent Kahl-Winter inflated Bonnie’s net worth from $450,000.00 to $1,770,000.00 to qualify her for the excessive policy limits which subsequently increased Kahl-Winter’s commissions. “Twisting” the two annuity policies into one insurance policy generated $52,355 in commissions for the agent. Bonnie would have been unable to pay the premium on this inflated policy.
Bonnie Madden filed a complaint with the Department of Financial Services. With the help of the Department, American National reversed and rescinded Bonnie’s policy and returned the premium funds to Bonnie and Allianz. Allianz then re-instated the annuity policy which had been surrendered.
Kahl-Winter had also applied for life insurance with Indianapolis Life with planned annual premiums of $59,219.00 to be paid for with withdrawals from American Equity. Bonnie consistently paid premiums for two years until the agent cashed in the American Equity policy. Bonnie’s life insurance policies with Indianapolis Life were cancelled for non-payment of premium.
After intervention by the Department, Indianapolis Life agreed to refund the premiums paid for two years. Moreover, American Equity agreed to re-instate the two annuity policies which were surrendered, and have set up two policies for the consumer which included interest from the date of surrender.
The total amount of funds recovered by the Department for Bonnie totaled $299,447.00.
Mary Nusser, age 89, Clearwater, Florida
In 2000, Mary heard a radio advertisement by agent Bijan Razdar, and set up a meeting with him. At their first meeting, Razdar told Mary that everything was “wrong” with her investments and that she should switch to companies he recommended. Razdar told Mary she “wouldn’t make any money” with the insurance companies her policies were with and he could “double” her net worth by making the change.
Razdar convinced Mary to purchase ten annuity contracts through Midland National Life and Amerus. In every case, the source of the funds used to establish the new annuities came from the surrender and exchange of existing annuities. Agent Razdar replaced more than $1.5 million in annuity funds with new annuities. As a result, Mary lost more than $95,000 in surrender charges and Razdar earned more than $239,000 in commissions.
But Razdar didn’t stop there. In March 2004, Razdar told Mary to sign papers to purchase what she was told were municipal bonds. In reality, Razdar used the funds to purchase yet another annuity – this time without her informed consent. Two months later, in May 2004, Razdar asked Mary to take withdrawals from her annuities under the pretense it was to going into her deceased husband’s trust. Instead, Razdar purchased another annuity without her consent. Mary was alerted to the misrepresentation in time to cancel the policies and retrieve her funds. Razdar would have earned another $16,000 in commissions had the policies been issued.
Razdar’s license was permanently revoked by the Department of Financial Services in early 2006. Mary received a settlement from Midland National Life.
Unfortunately, Mary was victimized again by a different agent, John Morehart, who characterized himself as the white knight who would correct the problems Razdar created. Instead, he guided Mary to surrender all of her annuities at a cost of more than $300,000 in surrender charges to buy a single premium life policy. Morehart then used about $200,000 of Mary's settlement money from Midland to place in an “investment” which happened to be the personal bank account of Morehart’s wife, Debra, also a licensed agent.
The Morehart’s licenses were revoked and they were permanently removed from the insurance industry in September 2008. Criminal charges are pending on a case brought against the Moreharts by the Division of Insurance Fraud and State Attorneys Office.
David Greene, age 81, Tallahassee, FLorida
An agent, Shannon Vick, targeted David Greene and his wife Thesselonia, who suffers from dementia and is currently in a nursing home. Through a series of unsolicited home visits, Vick convinced David to cash out existing annuity policies and other savings.
Vick then convinced David to purchase a number of life insurance policies and annuity policies, from which David was told he could access funds if necessary. Instead, the annuity payments are being utilized to pay the premiums on the previously purchased life insurance policies.
David was also convinced to take out a reverse mortgage, which the agent advised him was a way to provide for his wife’s medical care. Although hesitant to place his home in jeopardy, David was assured by Vick that a reverse mortgage was in his best interest. More than $60,000 realized from the reverse mortgage was then used to purchase another whole life policy, at the urging of this insurance agent.
Vick has been criminally charged in Georgia with conspiracy to commit insurance fraud, forgery, and exploitation of an elderly person. After being targeted by Vick, David has been devastated financially and emotionally.