Glenn Neasham: The issues which divide us
By Stephen D. Forman (LTCA)
Long Term Care Associates, Inc.
When it comes to the tribulations and trial of Mr. Glenn Neasham, we enjoy an embarrassment of riches on ProducersWEB. I’ve off-handedly counted 30-odd stories, some reaching as many as 200+ comments. Some narrowly dissect a particular aspect of the case, others seek status as the singular essay “to rule them all.” With so much ground to cover, let’s dive right into the major themes which have emerged over the course of the last few months.
1. Ms. Fran Schuber’s mental capacity at the time of sale
What was her mental state at the point of sale (February 6th, 2008), and could an individual taking reasonable steps have detected it? In a twist of fate, Allianz Life — as a result of pressure from class actions in other states regarding the “unsuitable” sales of annuities to seniors — began instituting a 75+ Calls Program to review key features of purchased products with new buyers, but not until February 18th. Fran was never called.
In any event, while the 75+ Calls Program would have measured her understanding of the product, it was not designed to measure mental acuity. But a company like Allianz could easily have utilized the same underwriting tools as any LTCI carrier — after all, they were still selling LTCI as late as October 2009. If this issue is to be taken seriously, why don’t annuity carriers screen for cognitive impairment (CI) as assiduously as LTCI carriers by applying at least a mini-cognitive screen via phone, or a full face-to-face assessment (F/F)? Can they not absorb the $200 charge?
As an aside, the leading LTCI carriers pay roughly $11million per day in claims, with over 30 percent of those directed to dementia and Alzheimer’s beneficiaries.
After more than three decades of continuous advances in underwriting tools and risk assessment, the system remains imperfect. Miraculously, I’ve read how some commenters believe they possess a “gift,” a foolproof method for detecting mild cognitive impairment (MCI) to the exclusion of confounding symptoms such as depression, medication, isolation, influence of others, bodily disease and fatigue. If only this “gift” could be field-deployed, highly-accurate, rapid, easily-trained-and-administered, and cost-effective.
No one disputes the ability to detect impairment in someone who’s already displaying the obvious signs. Was Fran Schuber such an individual in February of 2008? If so, Lake County Prosecutor Rachel Abelson doesn’t think Glenn could have known: “Not necessarily that he knew that she had Alzheimer’s or dementia, I couldn't prove that.”
Was the MasterDex 10 suitable for an 83-year-old client?
Today’s model suitability standards — revised after the sale — are a circular argument: “...it must be suitable, there must be 'reasonable' efforts to confirm suitability, 'reasonable' procedures must be maintained, and there must be 'reasonable' grounds to believe the transaction is suitable.” We are right back where we started. Prosecutor Abelson was mystified as to why Schuber would purchase the product. “We first thought the suspect was the boyfriend — we don’t have that much knowledge about annuities if that makes sense...the annuity didn’t benefit this person in her lifetime...I still don’t understand annuities.”
Other experts have noted that the full features and benefits of this particular deferred income annuity come with strings attached. Quoting our esteemed colleague, Sheryl Moore, “This is an annuity that requires a minimum 5-year deferral period. Thereafter, the annuity purchaser must annuitize, for a minimum 10-year period certain.
What if they don’t? They lose the 10 percent bonus, retroactive to day one. They lose all fixed and indexed gains on the contract, retroactive to day one. In return, they receive 1.5 percent interest on 87.5 percent of the original payment. Period.”
Mr. Neasham has said his client had “plenty of liquidity left” ($100,000) and that she a) wanted to beat what her bank was paying, and b) did it for tax purposes.
For their part, Allianz has responded to criticism about this type of product with the statement, “The immediate bonus is, in fact, credited to policyowners' annuitization values the same day the policy is issued. This means the policyowner receives interest on the bonus beginning the day their policy is issued. The cash bonus, in fact, can be withdrawn from the end of the first month that the policy is issued.”
Regarding the suitability of annuity sales to seniors, Allianz responds, “Whether or not an annuity is appropriate for a customer depends on a number of factors, not just age. Seniors are not all the same. They have different financial circumstances, different financial goals, and they purchase financial products for many different reasons. Seniors should have access to a full range of financial products, and are capable of choosing the product that is best for their circumstances.
Our agents tell us that many seniors find our annuity products valuable because they: 1) Can provide a guaranteed income for life. 2) Are safe: when policyowners hold our policies to maturity, we guarantee they will not lose money. 3) Are an attractive tool for transferring wealth to a surviving spouse or beneficiary, especially when seniors want to transfer wealth in payouts over multiple years instead of by a lump sum payment. 4) Offer multiple tax planning benefits.”
3.Is Glenn a sympathetic protagonist?
Those who’ve made financial donations to Neasham's cause have been cautioned to consider the repercussions among their friends and clientele. When you are known by the company you keep, what does it say about you if you make a donation in Glenn’s support? I would argue that it is possible — if not in the world at large, at least in one’s own mind — to keep a healthy separation between supporting the man and supporting the cause. After all, there are those who are drawn to this case for what they believe is its precedent-setting nature, and the desire to prevent such an outcome.
Almost none of us have met Glenn before his name first surfaced, and most of us still have not. But complaints have surfaced that his approach — an insistent stream of direct messages and emails to accusers and supporters alike, is disagreeable. Other commenters find his behavior entirely understandable. A minority — an attorney among them — have concluded that in Glenn’s very protestations, they witness the signs of a guilty conscience. “No one but a guilty man would say he’s innocent!” It’s Kafkaesque.
Was the California statute proven to a satisfactory degree?
While some commenters have fairly picketed the refrain, “Where’s the theft?”, we know that Prosecutor Abelson’s mind was steadfast: “[She] said the sale was considered theft because Schuber was deprived ‘for an extended period of time [of] the major portion of the value or enjoyment of the property.’" However, to prove this under Section 368 of California’s penal code, she also had to prove “specific intent”.
Moreover, as our esteemed colleague Dick Duff has pointed out, she had to do so in the absence of “consent”. In this regard, we find ourselves circling back to the earlier issues: Did Ms. Schuber possess the faculties to consent to the contract? Did Mr. Neasham possess specific intent to “take and carry away” her property?
Of interest to many commenters — whether it’s of legal consequence or not — have been the comparisons between CDs and annuities. Was it the surrender charges themselves which constituted the deprivation of property? Is the bank without sin? Was California’s elder financial abuse law well-served in this instance, where the client seemed satisfied with her transaction, her agent and the product?
5. Will the case get overturned on appeal?
From our esteemed colleague David F. Sterling, Esq., “In general, potential grounds for appeal in a criminal case include legal error, juror misconduct and ineffective assistance of counsel. Legal errors may result from improperly admitted evidence, incorrect jury instructions, or lack of sufficient evidence to support a guilty verdict. To grant the appeal, the appellate court must find that these errors affected the outcome of the case. If the errors would not have changed the verdict, they are considered harmless. [Description drawn from justia.com].”
Some have already questioned the quality of Mr. Neasham’s previous legal counsel. Others have attacked the credibility of the jury (albeit with what I’d call a glancing blow). Of particular interest will be an item of inadmissible evidence: an audiotape the jury was not allowed to hear. As Glenn describes it, “Later, under oath, the investigator said she had no video or audio recordings of the April 1 meeting with Fran; however, the day before closing arguments, at 10:30 a.m., she produced a six-and-a- half minute audio tape. The audio wasn't complete (it was a portion of a 15–20 minute meeting), and it malfunctioned. On the tape, you can hear Fran say why she made the purchase, and also that no one forced her to do so. It was not introduced into evidence and the jury didn’t hear it.”
He goes on to describe Dr. Douglas Rosoff, whose testimony the jury also was not allowed to hear [we do not know why], “The doctor said the condition she’s in today had taken one year to progress. [ie mental deterioration since only 2010]. He also affirmed that when she went to the doctor from 2005 to 2009, she seemed competent, according to the medical records.”
6. Ulimately, have you changed your mind?
The holy grail of any article or blog on ProducersWEB is not just to educate or clarify, but oftentimes to persuade. I’ve noted previously that Glenn Neasham is becoming a wedge issue: he’s dividing the country! Agents are digging in their heels, and confirmation bias is settling in.
I am asking for brave souls to come forward here and announce whether your mind has fundamentally changed for or against “the Glenn Neasham case” as a result of reading one of the countless articles or thousands of comments on ProducersWEB.
The cynic in me predicts that not a single individual will come forward. Not because you are all too shy — heavens to Betsy! Y’all will speak your mind, we know that. No, I hazard that no one will come forward because everyone’s minds are made up, and that 3+ months later, no one has budged an inch from their original position.
If you thought he was guilty and now think he’s innocent, or vice-versa, please share with us which Pweb’er and/or which comment tipped the balance for you. Maybe it will have a domino effect on others.
Thank you for allowing me to summarize what I believe are the primary issues to-date, based upon my readings. Have I overlooked something? By all means, please feel free to add or correct below.