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November 26, 2013 at 10:33 AM
On Dec. 6, 2010, Lake County (California) District Attorney John Hopkins signed a criminal complaint charging Glenn Neasham with “committed theft and embezzlement – financial abuse – with respect to an elder and dependent (sic) adult.”
On Oct. 23, 2011 Glenn Neasham was found guilty by a 12-person jury of a single count of felony theft, for selling an annuity to an elderly woman.
Editor’s note: The California Attorney General’s office has filed a petition with the state’s Supreme Court to review the reversal of the conviction.
The facts:
- Allianz followed California Department of Insurance regulations and submitted their annuity product to the state for approval prior to selling, including associated marketing material. The department approved the Allianz annuity product to be sold in their state, including marketing material, which set the age parameters for whom the product was approved to be marketed to.
- Allianz utilized best practices from the National Association of Insurance Commissioners to develop a state-approved annuity application, including a suitability form to determine the appropriateness of a specific annuity to a proposed annuitant’s specific circumstances.
- Glenn Neasham met with Fran Schuber on more than one occasion; he completed a carrier-approved fact finder, suitability and other forms and an annuity contract.
- Glenn Neasham submitted the state approved application along with the required suitability forms, and Fran Schuber’s check, to Allianz, which reviewed the paperwork, determined Fran Schuber’s suitability, in compliance with state law and industry practice, and issued the policy.
- The MasterDex 10 Glenn Neasham helped Fran Schuber reposition $175,000 in funds she had in a CD account with the Savings Bank of Mendocino had the best crediting strategy of the 350 fixed-indexed annuities approved for sale in California at the time. The product, at the time Fran Schuber purchased this annuity, had averaged 8 percent in the equity options. It offered 10 percent free withdrawals, for ample liquidity, policy loan provisions and a 10 percent bonus paid up front on any premiums added, anytime in the first five policy years (though the product had to be annuitized to realize this bonus, all gains were credited annually to the initial investment plus the bonus). Moreover, this product provided a 20 percent free withdrawal if the client entered a nursing home in this client’s case, $44,000 per year for five years.
- After five years the full cash accumulation value of the policy could have been annuitized (meaning a guaranteed monthly income for 10 years or longer). And if the client passed away during the payout her beneficiary would have received the remainder of the payments.
- Fran Schuber had enough liquidity to meet her needs in the form of $100,000 in other accounts along with $17,500 per year for at least five years. Fran Schuber’s $175,000 went directly to Allianz and by the time Glenn Neasham came to trial, Fran Schuber’s policy value had grown to some $220,000. Moreover, Allianz did not use or take any of Fran Schuber’s funds to pay Glenn Neasham’s commission. That was paid directly from Allianz’s general funds, as is industry practice.
So what happened?
It would appear Lake County District Attorney John Hopkins acted on the principle of “Don’t confuse me with the facts; I already have my mind made up.”
How do we know this? Glenn Neasham appealed his conviction and recently the Court of Appeal of the State of California – First Appellate District, Division Three in a decision written by Justice Stuart Pollak found: “Theft is a specific intent crime requiring the intent to steal. By permitting the jury to find defendant guilty if it found that the annuity deprived Schuber of a significant portion of the value or enjoyment of the funds with which she purchased it, regardless of whether the defendant considered the annuity to increase the value of her holdings and had no intention to deprive her of anything, the [trial] court prejudicially erred. Indeed it is doubtful whether one who gives equal value in exchange for property received can ever be found to have intended to steal the property received. Defendant’s conviction must be reversed.”
