A Georgia financial advisor and registered representative pleaded guilty to mail fraud in connection with a scheme that victimized more than 10 clients and resulted in losses of $4.6 million. The advisor apparently convinced clients to liquidate other investments in order to purchase annuities with higher rates of return. However, instead of investing the funds, he converted the money to his own personal use. The advisor faces a potential jail term of up to 20 years and a $250,000 fine.
A California insurance agent was convicted of receiving nearly $9,000 in advance commissions. The agent wrote phony applications for five people using information provided by a business associate. When the insurer supplied policies for the applicants, the agent failed to deliver them. However, he forged the victims’ signatures on receipts and returned them to the insurer. The policies ended up lapsing after two months for non-payment of premium. When the company contacted the victims, it learned they had no knowledge of the policies. The agent was sentenced to five years probation, 750 hours of community service, and restitution of $9,000.