A New Jersey broker has been sentenced to a 15-year prison sentence for scamming elderly clients out of their savings and using the money to pay for his mortgage, house repairs and European vacations. According to authorities, the advisor persuaded his clients to invest in a health-care investment program, which was to make investments in nursing homes and continuing care retirement facilities. The advisor promised clients a safe tax-free investment with semi-annual interest payments of 7.5 percent to 9 percent.
Instead, he used the funds to cover personal expenses, including annual trips to France. Using a Ponzi scheme to cover his tracks, the advisor perpetrated the scam for 17 years, resulting in the financial ruin of 12 elderly clients.
An Arizona financial advisor will go to prison for 44 months for scamming elderly clients out of their annuity savings. According to authorities, the advisor persuaded his victims to cash in their annuities in order to loan him money at an attractive rate of return. The advisor claimed to secure the loans with commercial property he owned, but then never keep up with the mortgage payments, eventually declaring bankruptcy. The advisor only made several interest payments to his clients, many of whom lost their life’s savings.
A Michigan annuities producer has been convicted in connection with a $1.6 million wire fraud case and was sentenced to serve 60 months in jail. The advisor apparently churned client annuities during an eight-year period, convincing clients to replace existing policies with new ones ostensibly paying high rates of interest. However, instead of using client proceeds to purchase new annuities, he deposited the money in his own bank account. Then he produced false account statements to assure clients he completed the transactions.
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