A former insurance agent has been sentenced to two years in prison for defrauding senior citizens in Oklahoma. According to investigators from the Oklahoma Insurance Department, Marshall Virden conducted investment seminars across the state, convincing participants to cash in their life insurance and annuity policies in exchange for precious metals such as gold and silver. The victims later learned those investments were fraudulent. Virden fled the state, but was eventually arrested in Florida. He pled guilty to charges that included exploitation of the elderly.
The SEC has taken action against two advisors in connection with a $42-million investment scam targeting Oregon seniors. According to authorities, the two men hatched a scheme offering phony promissory notes with guaranteed monthly interest payments from fully secured real estate investments. In reality, the investments were not secured and the advisors pledged individual investments as collateral for numerous promissory notes. The scam also had Ponzi features, with new investor money used to make interest and principal payments on prior notes. Until they were caught, the two financial rogues used investor money for unrelated deals and for personal expenses. They are currently facing a permanent injunction, disgorgement and civil penalties.
FINRA fined a Florida securities firm, its owner/CEO and one of its brokers for making fraudulent sales of collateralized mortgage obligations (CMOs) to unsophisticated, elderly and retired investors. According to regulators, the two scammers misrepresented and omitted information about their CMOs, suggesting to vulnerable consumers that the securities were risk-free because they were government-guaranteed bonds. They also further increased investor risk by trading on margin. During the two-year period in question, the CEO and broker neglected to tell clients about the negative impact that rising interest rates were having on their investments. As a result, investors lost $1.6 million, while the scammers earned $492,500 in commissions.