Hard to believe or even imagine but a 51-year-old California insurance advisor has been sentenced to four years in the “Big House.” Convicted on felony theft by a jury after three years of headaches and trials, putting his family into poverty, Glenn Neasham now faces a long stay at the “Gray Bar Inn.” His crime? Selling a single Allianz MasterDex 10 fixed indexed annuity to an 83-year-old woman. Documents show he interviewed the senior client’s banker, son and boyfriend prior to making his annuity recommendation.
And the weirder part is that the senior annuity purchaser has actually earned a $43,000 gain on the original $175,000 indexed annuity bought in 2008 (decent return given the recent market). In California, Allianz’s popular product is valid to offer to seniors up to age 85. Plus, according to court documents, the previously “ice clean” insurance salesman actually recommended leaving $100,000 of the seniors money in a bank CD to provide additional liquidity for her (which she followed). And the insurance advisor reportedly called the client’s son to inform him of her pending purchase and confirm her chosen beneficiary designations.
The snag? Apparently the female senior had early signs of dementia. However, her boyfriend and son each had ample opportunity and time to cancel the contract. It gets odder still: A buyer has gone “on the record” offering to buy the client’s annuity for more than she paid. Plus, even today, 100 percent of the client’s money is still intact in the original contract. So what’s the problem?
Great question considering that the client and her son still own the contract and the $43,000 benefit increase. Further, the senior client was not legally diagnosed with Alzheimer’s until three-and-a-half years after the annuity was purchased. But in this California case, the state apparently is on a witch hunt and wants to make it clear that dealing with seniors is very serious (and costly) business. This particular insurance professional was a good-looking, community role model. He served six years in the U.S. Navy and previously had published newspapers and is dedicated to his church.
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It appears that the annuity product was not the problem but the early onset of dementia was the issue. How does one then protect themselves from this type of reverse abuse from senior clients? Previously, suing under civil laws were somewhat accepted, but rarely if ever are criminal charges and felony convictions sought by the local district attorney. It’s a new era and new sheriff in town. I’m not certain how we should feel about this.