“Didn’t a bunch of people just recently get ripped off by annuities?”
You’re bound to hear that question if you’re an investments advisor aggressively selling annuities — and you should always have an answer. After all, the news media likes exploiting financial fraud, and it’s important that you put your clients at ease if they ever raise the issue.
Fortunately, with annuities, fraud is the exception and not the rule, although there are dramatic cases from time to time. Consider this one: A California man, John Slawinski, was sentenced to nine years in prison and ordered to pay $3.4 million in restitution for running an annuities scam targeting seniors. All 13 victims of his victims were in their 70s or 80s, according to court documents. Slawinsk, 60, pleaded guilty to six felonies, including three counts of embezzlement from an elderly victim, two counts of burglary, and one count of tax evasion.
What Went Wrong
Slawinski’s life and health insurance license was revoked in June 2014, according to the Palm Springs Newswire. The California Department of Insurance began investigating him in 2012 after investigators began receiving complaints.
The investigation revealed Slawinski’s method of defrauding his victims: He would get clients to sell him their annuities under the guise that he would get them a better investment. Instead of reinvesting the money, he deposited the cash into his bank account. Prosecutors said he never purchased new annuities for the victims. Prosecutors said instead of doing the right thing Slawinski submitted fake financial documents along with minimal payments to the victims, leading them to believe their money was safe.
What Happened Next
No one wants to see seniors get scammed, and it’s scary imagining how horrible it is for a senior to lose their annuity retirement savings through a scam. “It is important that we protect the victims of crime and this case shows how seriously we take the crime of elder abuse, whether that abuse is physical, mental, or financial,” Riverside County District Attorney Mike Hestrin told the Palm Desert Patch. “When a victim loses much or all of their life savings later in life, that loss can be devastating.”
Catherine Byerly covers the secondary annuity market for Annuity.org and StructuredSettlements.com. She received a Political Science and Communications degree from the University of North Florida and has worked in communications for the past five years, handling everything from on-air public radio casts to writing for business journals.
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