The cash needs of one Ventura, CA insurance agent were apparently too much for his annual salary. As a result of getting cash for annuity payments that weren’t his, Joseph Anthony Mele now faces charges of grand theft by false pretenses, theft from an elder, and money laundering. If convicted he could be sentenced to up to 30 years in prison and $2.4 million in restitution and fines, according to the Ventura-area news source VCStar.com.
The charges stem from two separate incidents in which Mele was hired as a financial planner for two elderly ladies and ended up stealing an estimated $2 million, according to the state Department of Insurance.
One of the women was a 93-year-old who was convinced by Mele to reinvest her retirement portfolio with him. In some cases people get cash for an annuity now, but Mele sold her $1.2 million worth of long-term annuities and rewrote them in a way that he was able to obtain more commission from, with the understanding that he would be getting her better returns.
The advantage of selling your annuities is that you can get large amounts of cash now instead of waiting five, 10, 20 or more years for an annuity to reach maturity.
According to officials he made about $295,000 in commissions and caused the woman to lose more than $500,000 in surrender penalties. Surrender charges are explained in your annuity contract and typically range from 7 to 15% of the amount you plan to withdraw from your annuity. In some cases it can be a good idea to sell annuities if you need extra cash to do something like eliminate debt, but that doesn’t appear to be the case in this scenario.
Mele’s greedy and deceitful cash needs didn’t stop there though. In addition to the shady annuity manipulations, Mele is also accused of spending $800,000 of the woman’s money from unauthorized checks he wrote himself. He told her he was investing the money on her behalf, but in reality bank records show the money was used on travel, gambling, and other personal expenses. The other woman had about $80,000 stolen from her.
Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses. Fortunately, by the amounts of money these women appear to be in that exclusive group, but that doesn’t change the fact that they were scammed in another case of someone taking advantage of the elderly for their own cash needs.
