What do Bernie Madoff and Glenn Neasham have in common?
By Paul Cross
Annuity National Brokerage Co.
The Neasham case has provided the opportunity and the platform for articles, blogs, and expressed comments biased in nature to the cause and/or the mission of the authors to their own good and certainly this article is no exception.
We’ll explore annuities and their benefits to baby boomers, seniors, the elderly and the rewards to family members. We’ll dig into the reasons people are transferring billions into annuities every month and the reasons the government is encouraging 401(k) transfers into annuities.
With 10,000 people retiring daily and applying for Social Security, that’s 70,000 people weekly. And, let us not forget that many people are being forced into early retirement before becoming eligible for Social Security.
In our court system when the judge, the prosecutor and the jury lack education, experience and knowledge of the issues at hand, the defense calls in an expert witness. Yet, in Glenn Neasham’s case the overzealous court granted no merit to the expert witness Richard Duff, J.D., C.L.U.
Neasham was overzealously attacked by the judicial system. The court blocked evidence in support of Neasham, leading to an unjust verdict to the benefit of the mission of the prosecutor without regard to the expert witness. (Documentation reveals important evidence was blocked.)
The scope of the injustice is the very reason that the protest against the Neasham verdict has grown in leaps and bounds. Our mission is to seek real unbiased justice, and that is the purpose of the appellate court where Neasham’s case will be heard next.
What do Bernie Madoff and Glenn Neasham have in common?
They were both trusted advisors. They both received referrals from clients. They both were convicted of fraud and theft and sentenced to jail.
How do they differ?
Bernie Madoff co-mingled funds and produced false account statements. Madoff pled guilty to 11 federal crimes and admitted to operating the largest Ponzi scheme in history. The original federal charges estimated the size of the fraud to be $64.8 billion, based on the amounts in the accounts of Madoff's 4,800 clients as of Nov. 30, 2008.
Glenn Neasham sold a $175,000 annuity and was convicted of theft and sentenced to jail. There was no co-mingling of funds, and no erroneous or false account statements. The money went directly to the annuity carrier, compliance and suitability were approved, and the annuity was issued with a credited 10 percent premium bonus and compound growth.
There was no complaint filed by the owner, the significant other of the beneficiary, or any family members while the agent, Glenn Neasham, was bankrupted, convicted of theft and sentenced to jail.
Are annuities appropriate for the elderly?
The greatest fear is running out of money during retirement. People are transferring billions monthly into annuities. For many the no. 1 reason is safety, with more income, more growth, and less tax, while providing more for family beneficiaries.
A man walked into the bank to transfer funds to an annuity, and his personal banker asked, “Why would you buy an annuity at your age?”
Well, Mr. Banker, did you know that the little interest earnings on bank CDs can bump you up into a higher marginal tax rate and trigger or increase tax on Social Security income. One dollar of interest can trigger tax on 85 cents of the owner’s Social Security income and 85 cents on the spouse’s Social Security income. One dollar of interest credited to the CD holder could trigger income tax on $2.70, but not the interest credited to your annuity.
At what age do we become too old to enjoy more income, more growth and less tax? Seniors and the elderly are now paying more than $90 billion in tax on their Social Security incomes. That’s money they could spend, save or invest.
Your banker could be your financial expert, and your mechanic could do your next root canal. Are all annuities created equally? Of course not
In Newsweek, Jane Bryant Quinn labeled the variable annuity as one faulty investment. Not only is your money at risk, you have annual fees and charges that grow if your variable annuity grows. In a down market, the annual fees and charges increase your losses in a variable annuity. So, for seniors and the elderly, let’s throw out the variable annuity.
What is appropriate for the elderly?
Short term one-year, three-year and five-year annuities with rates better than bank CDs with the opportunity to have more income, more growth and less tax, while reducing or eliminating income tax on Social Security income.
Here’s an example:
A five-year annuity interest rate of 3 percent vs. a five-year CD at 1 percent. That’s 300 percent more growth before we take into consideration the tax savings on interest credited and tax savings on Social Security income.
Note: From the annuity, you could have 1 percent interest paid to you (the CD rate) and still have 2 percent growth. Now that is more income, more growth and less tax.
Are long-term annuities appropriate for the elderly?
Yes, in some cases. It is relative to the individual’s situation. Unfortunately, because of overregulation of compliance and suitability laws many annuities are no longer available after age 80.
Annuities with a longer surrender (maturity) period can provide 10 percent premium bonuses that are credited and compound with interest from day one. Now at 1 percent, consider how long it would take your money to earn 10 percent in the bank.
Special lifetime income features are also available up to certain ages that can increase the growth for income payouts guaranteed for life.
The government is now recommending 401(k) transfers to annuities. Why?
To provide an income you cannot outlive. The suggestion is to transfer a portion of your 401(k) into an annuity and let it grow until age 85 and elect an income stream for life. We could speculate that perhaps there is a concern of outliving Social Security income, which is now more than $15 trillion in the red.
The reality is people are living longer in retirement than ever before, all the way to age 100 and beyond. In his book, “The 100 Year Lifestyle,” Dr. Plasker revealed the fastest growing age group in America is now age 100+, and there will soon be 4 million people age 100+.
Do annuities have any real credibility?
Economists around the globe and financial universities have concluded and documented that income annuities can provide an income for life at a cost as much as 40 percent less than a traditional stock, bond and cash mix.
We could transfer 60 percent of our retirement plan into an income annuity or a premium bonus annuity with a special lifetime income benefit feature, thereby increasing the income value by 15 percent with an income guaranteed for life. And, we could transfer 40 percent into another premium bonus annuity with a special lifetime income benefit feature growing and compounding until we need an increase in retirement income. Are annuities safe?
Annuities date all the way back to the days of the Roman empire, when gladiators traded money and property for annuities to provide income for their families should they not return from the wars and the deadly games they so proudly played. In the 1700s, the European banks issued annuities. And in the early American days, the railroad companies issued retirement annuities to employees — that was until the employees got railroaded.
The annuity contract is the safest money contract available, with what I will reference as three layers of protection. First, the annuity is protected by the statutory reserve of the issuing company, which is required by law to maintain a statutory reserve greater than the cash values of the annuity contracts. The statutory reserve is in addition to operating capital and other assets.
Second, should the statutory reserve drop below the required minimum, the company will go into receivership under the management of the state insurance commissioner. Should the commissioner not visualize restoring the company, then the policies are offered for sale to other companies with sufficient capital and reserves.
In most cases, step two is successful, however should it fail, then the guarantee association will assess all companies doing business within the state a pro-rata share, based upon the volume of business the company does within that state, to protect all policyholders up to the state’s guarantee association limits. While the insured amount varies by state most now range from $150,000 up to $300,000.
Who do people look to for protection of their most valuable assets, their home, their lives and other assets? They look to insurance companies. Who better to look to protect our money and our retirement plans with guaranteed income for life?
What are the inherit values of annuities to the beneficiaries? The annuity beneficiary form trumps all other legal documents. The annuity values are payable directly to the beneficiary outside the probate courts, saving court battles and legal fees. It’s another way annuities provide more real value to beneficiaries.
To the benefit of spendthrift beneficiaries, the owner with a restricted designated beneficiary form can have some of the value paid in lump sum and the balance payable in installments over the beneficiary’s life expectancy on qualified and/or non-qualified annuities. Now think about that. If the entire balance is payable over life expectancy on non-qualified annuities that have automatically re-invested tax dollars compounding tax-deferred, the beneficiary benefits by converting the big tax balloon payment into a stream of income
Give me a break and get back to the real mission
With that being said, the mission of this article is to bring exposure to violations of the court system, to provide knowledge of the monetary value and benefits of annuities to the owners and their beneficiaries, and to drum up the cavalry to take on the fight to the defense of their very own purpose and mission.
Why will this case be extraordinarily tough and costly to exonerate when all of the facts reveal an unjust conviction of theft? A major reason is the exposure of the judge and the prosecutor to possible violations of the judicial system.
How can there be a just cause for trial of theft when the presumed victim has not filed a charge — not even a complaint? Ordinarily, when theft has been reported the claimant can dismiss the charge. Generally, a conviction of theft requires evidence of loss.
What do you have at stake? Our professional image is on the cutting edge, and our future is in jeopardy. If we permit this unjust conviction to remain, it may very well bring on the largest number of class action suits advertised and solicited by legal firms all across America.
The real question is, what can I do? Call upon your annuity carriers and national marketing company to come out of the woodwork and help. America is where the people make impossible dreams come true. Let us stand together and not let our dreams be stolen from us.
The conviction of theft was based upon the robbery of Fran’s ability to access her own money without penalty. Does that mean every money contract including bank CDs, bonds, annuities, life insurance, variable annuities, mutual funds and stocks, including well-planned irrevocable wills and trusts, could be attacked as theft in a court of law? It’s time to wake-up. We are in jeopardy.
It’s time for us to come together and support the exoneration of the erroneous conviction of theft.