Agent faces up to four years in prison for selling an annuity
By Roccy Defrancesco
The Wealth Preservation Institute
Update: Judge Richard Martin on Wednesday denied the motion for a new trial, refused to drop the felony charge to a misdemeanor and sentenced Neasham to probation and 300 days in jail. Martin stayed all but 90 days of the sentence. Neasham said he plans to appeal.
When you read the facts of this case, if you know anything about annuity sales, you will not think them to be egregious in a manner that would lead to a civil suit, let alone a criminal one.
I’ve known this case was in the works for some time, but I didn’t really think the outcome would be jail time for the defendant.
It’s really quite shocking. When I had this story forwarded to me yesterday, I was saddened. Why saddened? Sure, I feel bad for the advisor; but as an attorney, I believe the story simply speaks to the unprofessionalism of the attorney who decided to prosecute this case. It makes all attorneys look bad and shows us how abusive the legal process can be (and how helpless a defendant can be).
An agent sells a Masterdex 10 (Allianz) annuity to an 83-year-old. As it turns out, the client had some form of dementia (although the agent didn’t see signs of it and was not informed by the client or her relatives about her dementia).
Through Monday morning quarterbacking and due to outside pressure, investigations ensued, and the agent was charged with felony theft. This is ironic since he did not steal anything and since the annuity never lost money. Yes, there was a declining surrender charge, but to be charged and convicted of theft is simply crazy.
This is a bad facts, bad jury and an overzealous prosecutor case that is hard to fathom. I’d like to tell you that we can learn a lot from this case, but I can’t think of much except to make sure you send your CYA letter after each annuity and life sale.
I know that insurance companies have been watching this case and have instituted procedures to help prevent this in the future with phone interviews with clients over a certain age, but unfortunately, that won’t help this agent.
To read a full summary of the case, click here.