The Financial Industry Regulatory Authority is fining Prudential Annuities Distributors Inc. $950K for not identifying and stopping a senior fraud scam that allowed a broker to steal $1.3M from an older investor’s variable annuity account. The self-regulatory organization said that the firm failed on numerous occasions to properly investigate “red flags” indicating that Travis Weitzel was moving money from the 89-year-old’s VA account to a bank account listed under the maiden name of Wetzel’s wife.
According to FINRA, from 6/10 until 9/12, Wetzel turned in 114 forged annuity withdrawal requests to Prudential Annuities. He initiated up to five withdrawals a month, totaling close to $50K. He asked for the money to be wired from the elderly customer’s account to the third-party account of his wife.
The SRO said that Prudential Annuities did as Wetzel instructed without properly investigating the warning signs. When the firm looked at certain withdrawals during several quarterly audits, it saw that the money was going to a third party and determined that these were legitimate transactions. Prudential also purportedly failed to discern what the relationship was between the elderly customer and the third-party account holder.
Wetzel, who used to be a registered sales assistant at LPL Financial (LPLA), pleaded guilty to wire fraud and money laundering related to these allegations in 2014. According to the Department of Justice, the elderly client whom Wetzel bilked had health issues, which made it easy for the former broker to take money from the variable annuity account.
Last year, a federal judge sentenced Wetzel to 3 ½ years in prison. He agreed to forfeit over $1.2M.
FINRA also found that inadequate controls and supervisory procedures at Prudential Annuities were a factor in the firm’s failure to identify and stop Wentzel’s variable annuity fraud. Prudential Annuities and LPL Financial have since paid the older customer back.
Even though Prudential Annuities is settling with FINRA, it is not admitting to or denying the civil charges.
Senior Financial Fraud
Unfortunately, elderly investors are a popular target of financial fraudsters. There are those who will take advantage of seniors who are suffering from dementia or other health issues, stealing their retirement money and savings, while leaving them to contend with the fallout. Your best chance of financial recovery is to speak with a financial fraud law firm who has experience working with older investors and their families.
Recently, another broker and investment adviser was charged in criminal court for allegedly bilking older investors of $400,000. William Joseph Boyle claimed the money was going into real estate, bonds, and stocks. Instead, he allegedly used the funds to help pay for a bar in Philadelphia and cover his personal expenses and the expenses of his family. Boyle allegedly used newer clients’ money to pay earlier clients to make it appear as if the investments were paying off. He is facing multiple counts of wire fraud, mail fraud, investment adviser fraud, and securities fraud.
According to Patch.com, even after Boyle was permanently barred from working as a broker by FINRA, he continued to serve in this role. While working for Legg Mason Wood Walker—Citigroup (C) has since acquired the firm—Boyle allegedly defrauded an elderly nun of about $531K and bilked an elderly widow and retired couple of approximately $80K.
Senior Financial Fraud
Even if the financial adviser who bilked you is arrested and prosecuted, you still want to have a legal team representing you in getting your money back. At Shepherd Smith Edwards and Kantas, LTD LLP, we have helped thousands of investors to recoup their securities fraud losses. Contact our senior financial fraud law firm today.
Lower Merion Stockbroker Scammed Elderly Out Of $400K To Open Philly Bar: US Attorney, Patch.com, July 5, 2016