TopClassActions  |  December 2, 2013

Category: Legal News

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Colo. Insurance Adviser to Be Prosecuted for Annuities Fraud

By Amanda Antell

 


Colorado Annuities Insurance LawsuitAccording to federal criminal and civil charges filed by the U.S. Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office, Colorado investment adviser Gary Snisky stole nearly $3 million by selling his clients fake annuity contracts as a salesman for his Longmont-based company, Arete LLC. 

Snisky allegedly used Arete to target elderly annuity holders, hiring legitimate third-party insurance agents to convince them to drop their current annuity contracts and sign on with him. Federal prosecutors say that Snisky promised dozens of these clients safe returns in government-backed bonds.

According to court documents, Snisky swindled money from more than 40 elderly investors in eight states to pay his mortgage and cover commissions to those who sold the investments. Prosecutors say that he performed a classic swindling technique in which he told the elderly clients that it was a safe investment, and then pocketed the money for himself. 

Snisky has denied any wrongdoing. He proclaims himself to be an institutional trader, and that he he used government-backed bonds to perform legitimate overnight banking transactions. 

Snisky is to be arraigned Tuesday and remains in federal custody. He is also a defendant in a related lawsuit filed in March 2013 by Colorado Securities Commissioner Fred Joseph. Joseph alleges Snisky sold unregistered securities using a variety of company names, gathering $3.2 million from approximately 20 investors.

Overview of Annuities Fraud

Ideally, annuities can be a secure way for people to expand their retirement funds, and can be used for investment plans. Unfortunately, annuities have become methods used by insurance companies to abuse their elderly clients’ trust and finances, leading to annuities fraud. 

Annuities are typically paid back in full on a specific date, called a fixed annuity, or they get paid back over the years in a variable annuity. While fixed annuities are generally considered safer, they have the possibility of outliving the client. Variable annuities often have various complications due to the way the insurance company invests them. These complications pave the way for annuities fraud. Seniors should be especially aware of advisors who attempt to sell them annuities under the following circumstances:

• A senior is unlikely to live long enough to collect their payments.
• The annuity makes up more than 35 percent of the senior’s assets.
• The Surrender Fee (the amount the senior will have to pay if they cash-in an annuity early) is more than 14 percent of the principal.
• The same agent sold the senior multiple annuities.

The annuities fraud lawsuit is U.S. Securities & Exchange Commission v. Gary C. Snisky, Case No. 13-cv-02149, in the U.S. District Court for the District of Colorado.

File an Annuity Lawsuit Today

If you believe that you or a loved one have been the victim of annuities fraud, you have legal options. Please visit the Life Insurance Annuities Fraud Class Action Lawsuit Investigation. There, you can submit your claim for a free legal review and if it qualifies for legal action, a seasoned annuities fraud lawyer will contact you for a free, no-obligation consultation. You will be guided through the litigation process at no out-of-pocket expenses or hidden fees. The annuities fraud attorneys working this investigation do not get paid until you do.

 

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