Insurance agent to face 99 years in prison for selling phony annuities
July 29, 2011 by Darla Mercado
Elderly clients of Texas agent lost more than $5 million,
including an investor with dementia
By Darla Mercado
July 29, 2011
A 76-year-old insurance agent is facing nearly a century of prison time after
pleading guilty to securities fraud stemming from the sale of unregistered
securities and fake investments.
John F. Langford of Amarillo, Texas, this week pleaded guilty to 15 counts of
securities fraud and other charges and will be sentenced on Sept. 12, according
to the Texas State Securities Board.
Mr. Langford admitted that his scheme cost clients more than $5 million,
according to securities regulators.
The sentencing arrives nearly three years after Texas securities cops began
investigating Mr. Langford and his business partner, Jimmy Don King. The men
came under suspicion after the guardian of an elderly woman sued them, claiming
the victim had been convinced to invest $941,756 in nine “private annuities.” A
court later ruled that the woman was incompetent, due to dementia.
Mr. King has been indicted on 10 accounts, including selling unregistered
securities.
Angry investors who bought private annuities and promissory notes have filed
claims in bankruptcy court against Mr. Langford, who had filed for Chapter 7
bankruptcy protection in 2009. The ill-gotten gains allegedly were used for
personal purchases and to pay off other investors who bought the phony products,
clients alleged.
In one of the cases, filed by Hazel Carter, a guardian for investor Ruth
Alice Roach-Worak, the client was over age 80 when she put close to $950,000
into a handful of fraudulent annuities between 2004 and 2006. Many of the fake
annuities weren’t going to come due for 10 years, at which point Ms. Roach-Worak
would have been in her 90s, according to the complaint. A judge later ruled that
she was incompetent to have made the decision.
The private annuities supposedly paid out as much as 8%, while the promissory
notes promised interest rates as high as 9%, according to the indictments.
Tim Pirtle, attorney for Mr. Langford, and Selden Hale, who is representing
Mr. King, were not available for comment.
