Agent Who Victimized Two Senior Citizens With $2 Million Annuities Scam Faces 30 Years in Prison
November 25, 2015 by Dennis Gorski, managing editor-online, BestWeek: Dennis.Gorski@ambest.com
SANTA BARBARA, Calif. – A financial planner who authorities say churned two senior citizens’ annuities portfolios into $2 million in illegal gains could be going to prison for up to 30 years.
Joseph Anthony Mele, 30, of Ventura, pleaded no contest to multiple felony counts including grand theft by false pretenses, theft from an elder and money laundering, according to a statement from California Insurance Commissioner Dave Jones.
Mele convinced his first victim, a 93-year old woman, to invest her retirement portfolio with him, and in June, 2007, he sold her more than $1.1 million in long-term annuities, the statement said. Mele then churned the annuities to make additional sales, netting $295,965 in commissions and causing the woman to lose more than $500,000 in surrender penalties, the statement said.
He also wrote himself $800,000 in unauthorized checks from the victim’s checking account, supposedly for investment purposes, but bank records showed the proceeds were “used for personal expenses including entertainment, travel and gambling,” according to Jones’ statement.
Mele also victimized a 74-year-old woman, who lost $80,000 in surrender penalties, lost premium and interest, and suffered additional tax liability after Mele convinced her to surrender her annuities early, the statement said.
Some of the insurance companies refunded surrender penalties to the women.
Mele’s scam came to light about a year ago, after the Santa Barbara Financial Abuse Specialist Team and Adult Protective Services told authorities they suspected elder abuse of the first victim. The California Department of Insurance Investigation Bureau began a joint investigation with the Santa Barbara Police Department. Mele was charged in early June. The Santa Barbara County District Attorney’s Office is prosecuting the case.
Mele faces up to 30 years in prison, restitution of more than $800,000 and fines of $1.6 million when he is sentenced on Jan. 4, 2016, in Santa Barbara Superior Court, according to the statement. The insurance department is in the process of permanently revoking Mele’s insurance license, it added.
Mele is currently out on bail.
