Elderly investors bilked in annuities scam to get bubkes

Elderly investors bilked in annuities scam to get bubkes
Investors ensnared in a $7 million scam involving so-called “private annuities” will be getting back only a sliver of their original investment.
MAY 10, 2012
A group of mostly elderly investors ensnared in a $7 million scam involving so-called “private annuities” will be getting back only a sliver of their original investment. On Tuesday, the trustee overseeing the bankruptcy case of insurance agent John F. Langford of Amarillo, Texas, revealed that most of the clients in a fraud masterminded by the agent will be getting back only 2.8 cents for every dollar they had invested. Mr. Langford is currently doing time — 15 years in prison — after pleading guilty last fall to 15 counts of securities fraud and other charges. The Texas State Securities Board said that he stole close to $7 million from dozens of clients through the sale of unregistered products, including phony “private annuities” and promissory notes that promised interest rates as high as 9%. After going through Mr. Langford's assets, which included an $85,000 Jackson National Life Insurance Co. annuity and $2,600 in furs and jewelry, trustee Kent Ries was able to scrape up $212,126 from which to pay off unsecured creditors' claims. The jailed insurance agent owes money to 111 individuals and companies. Among the largest claims Mr. Langford is facing: a $1.24 million claim from Hazel Carter, guardian of investor Ruth Alice Roach–Worak. Ms. Carter pursued Mr. Langford in federal bankruptcy court in Texas, arguing that Mr. Langford had made misrepresentations to Ms. Roach-Worak when selling “private annuities” to her between 2004 and 2006. Ms. Roach-Worak, who was over age 80 at the time, had chipped in about $950,000 in purchasing the phony investments, many of which weren't expected to come due until she was over 90. Ms. Carter is expected to net only $35,765 out of her million dollar claim, according to trustee documents. Bob Elder, spokesman for the Texas State Securities Board, noted that in many fraud cases, victims manage to get only a few cents on the dollar. “There's generally little recovery in fraud cases,” he said. “This fraud has gone on for a while, and Mr. Langford made a number of Ponzi-type payments. The money disappeared, and this is why it's critically important for investors to check if the person and the investment are registered before making an investment.” He noted that often victims make the mistake of purchasing unregistered investments from insurance agents, assuming that “because they're involved in the financial field, they're authorized to sell securities.” A call to Mr. Langford's attorney Tim Pirtle was not immediately returned.

Latest News

Mariner announces an acquisition double, adding $1.7B to its AUA
Mariner announces an acquisition double, adding $1.7B to its AUA

Firms in New York and Arizona are the latest additions to the mega-RIA

Michigan insurance agent to stand trial after charges of insurance fraud
Michigan insurance agent to stand trial after charges of insurance fraud

The agent, Todd Bernstein, 67, has been charged with four counts of insurance fraud linked to allegedly switching clients from one set of annuities to another.

NY Appeals court tosses $500M civil fraud penalty against Trump; upholds injunctive relief
NY Appeals court tosses $500M civil fraud penalty against Trump; upholds injunctive relief

“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State,” Justice Peter Moulton wrote, while Trump will face limits in his ability to do business in New York.

Andy Sieg faces internal HR investigation into conduct at Citigroup: Report
Andy Sieg faces internal HR investigation into conduct at Citigroup: Report

Sieg, 58, was head of Merrill Wealth Management, left in 2023 and returned that September to Citigroup, where he worked before being hired by Merrill Lynch in 2009.

Understanding people is key to how financial advice has to evolve
Understanding people is key to how financial advice has to evolve

Technology can do a lot of things, but advisors still have undeniable value

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.