An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Insurance Agent Sentenced To Prison In Annuities Scam Targeting Elderly
June 3, 2013
BrokeAndBroker reports about scams targeting elderly investors. Regrettably, there has been far too much to comment about in recent years. I offer this current article as a warning to senior citizens who are dazzled by the prospects of flipping one annuity for another -- and as a wake-up call to those who are concerned about the financial affairs of their grandparents and parents. Too good to be true is quite often just that.
The Promise Of Bigger Returns
Starting in 2001, William Edward Lowder, 57, Williamsburg, MI, a licensed insurance agent and annuities producer who operated as Lowder Insurance and Ash Brokerage convinced several of his elderly clients to liquidate their existing annuities. Under some circumstances, such a recommendation may be appropriate but those circumstances are, at best, extremely limited. As will be clear, Lowder's proposal was not such an appropriate circumstance.
The Con Game
On the surface, Lowder proposed that after his elderly clients had liquidated their annuities, he would reinvest the proceeds in different annuities with higher rates of returns. In fact, from 2001 through 2009, Lowder simply stole over $1 million in proceeds and deposited the sums into his own bank account. In an effort to cover his trail, he provided his victims with fabricated statements showing bogus reinvestments. To compound his problems, Lowder also failed to file his ill-gotten gains as income on his federal individual tax returns from 2006 to 2009.
The Plea
On January 9, 2013, Lowder pled guilty to a felony Information in the Western District of Michigan and faced a maximum penalty of 20 years' imprisonment for his wire fraud and three years' imprisonment for filing a false tax return. He will also be ordered to pay restitution to his victims.
The Sentence
On May 29, 2013, Lowder was sentenced to 60 months in prison for wire fraud and a concurrent 36 months in prison for filing a false 2008 tax return. During sentencing, the Court emphasized the significant duration of Lowder's fraud and his repeated failure to re-pay any of his victims. As part of his sentence, Lowder was also ordered to pay restitution of $1,567,908 and to complete 300 hours of community service after serving his sentence of imprisonment.
READ these BrokeAndBroker articles about elderly investors:
- Elderly Customer's Signature Submitted Three Days After His Death
- Former Wells Fargo Broker Rips Off Elderly Widow
- Barred Stockbroker Barred Again For Wire Transfers From Elderly Client
- Stockbroker's Borrowing From Elderly Client Gets Him Barred
- ING And Wells Fargo Catch Broker Ripping Off Elderly Client
- FINRA Bars Broker For Loans From Elderly Widows And Family
- Elderly Paraplegic With Dementia And Multiple Sclerosis Victimized In FOREX Hedge Fund Fraud
- FINRA Sanctions MetLife Manager In Elderly Client's Account Opening
- Lawyer And Colleague Charged With Ripping Off Washington Mutual Bank and Elderly Victim's Apartment Building
- Elderly and Infirm Victimized By Con Artist With Can't Lose Investment Formula
- FBI Nabs Bogus Priest Who Ripped Off Elderly Nun In Fake Will Scam
- Stockbroker Defrauds Cerebral Palsy Victim and Elderly
- Excessive Trading and Unauthorized Discretion In Elderly Clients' Accounts
- Wall Street's Shame: Elderly Clients As Victims of Fraud