October 7, 2008
CFO SINK, STATE ATTORNEY MARK OBER MEET WITH SENIORS DEVASTATED BY FINANCIAL FRAUD
First meeting of Sink’s Safeguard Our Seniors Task Force generates ideas, solutions
TAMPA—Alice Bouchard, 94, from New Port Richey, was one of three senior investors who shared her story of being exploited financially by an unscrupulous insurance agent on Monday at the Hillsborough County Courthouse with Chief Financial Officer Alex Sink, Hillsborough County State Attorney Mark Ober and members of the Safeguard our Seniors (SOS) Task Force. The discussion with senior investors was part of the first meeting of the SOS Task Force, which was created by CFO Sink last month to review and recommend solutions to better protect Florida seniors against financial fraud, with an immediate focus on annuity fraud.
Joining Alice at the event to share their personal experiences were Bonnie Madden, 81, from Port Richey and Mary Nusser, 89, from Clearwater, Florida.
Alice and her husband had invested in annuities since 1994. An annuity is a life insurance product that offers a guaranteed series of payments over a period of time. Following the death of Alice’s husband in 1998, a corrupt agent, Bijan Razdar, began moving Alice’s annuity policies from one company to another, also called “twisting,” in order to generate commissions for himself while promising Alice greater returns on her investments. She “trusted” the agent was working on her behalf. Over a period of six years, Razdar “twisted” Alice’s annuity investments at least 30 times, which resulted in Alice paying more than $20,000 in surrender charges and losing nearly $293,000. The agent received over $140,000 in commissions. Although Razdar’s license was permanently revoked by the Department of Financial Services in early 2006, due to inadequate legal protections, he never served any jail time for defrauding Alice.
“We have zero tolerance for anyone who manipulates and cheats our seniors out of their hard-earned retirement funds,” said CFO Sink, who oversees the Department of Financial Services and has taken action against several dozen agents for theft and fraud involving the elderly. “We need tougher penalties so we can bring the full force of the law against these scam artists and make sure they serve jail time.”
Ober agrees. “When possible, we need to amp up penalties for egregious acts of fraud,” said Ober, who is also president of the Florida State Attorneys Association.
In addition to the need for stronger criminal penalties to help more efficiently prosecute “twisting” of annuity products, SOS Task Force members discussed several ideas for improving protections for senior investors, including:
• Strengthening other statutes, including “organized scheme to defraud,” “theft of a senior 65 or older” and “financial exploitation of the elderly;”
• A review of the industry’s oversight of their sales agents, including implementation of “monitoring standards;”
• Capping surrender charges and limiting the time that a company is able to charge them;
• A review of the commission structure for certain annuity products;
• Eliminating the “opt out” on disclosures when a product is sold;
• More aggressive education with the public, including the agents who sell these products; and
• Establishing one set of regulations related to the sale of annuity products.
The SOS Task Force’s next meeting will be held in mid-November in Ft. Myers. In addition to considering solutions to better protect seniors against annuity fraud, task force members will also evaluate ways to safeguard seniors against problems associated with Stranger-Originated Life Insurance (STOLI) products and reverse mortgages being used to fund the purchase of insurance products.
To learn more about the SOS Task Force or what to consider when purchasing annuities, visit www.FLSeniors.net. Senior Floridians who believe they may have been the victim of annuity fraud should call 1-877-My-FL-CFO or log on to www.MyFloridaCFO.com to file a complaint.
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.