Guggenheim Hit With Annuity Fraud and Racketeering Lawsuit

Insurance giant Guggenheim Partners LLC is being sued by two elderly policyholders for allegedly wrongfully concealing the financial states of its clients.

Guggenheim and its subsidiaries are being accused of fraud and racketeering by elderly clients, who claim that the insurance companies convinced them to buy annuities.

The plaintiffs, Clarice Whitmore and Helga Maria Schulzki, claim that after agreeing to buying the annuities, the insurance company allegedly took control of their cash reserves, and drained them of every cent.

The insurance company allegedly threatened the security of the annuities they sold to the two policyholders when ever the the two women tried to object.

The women claim Guggenheim’s tactics were pernicious, as they were more concerned about their own bottom line than that of their policyholders. They had committed insurance fraud under the guise of selling an annuity, in order to recover any profits they lost during the recession, while distributing the policyholders’ money amongst themselves.

Lawyers for Whitmore and Schulzki compared the insurance company’s tactics to the now-collapsed Houston energy company, Enron Corporation. By using complex accounting systems, the insurance giant was able to fool outsiders into believing that the annuities were gaining money and that the policyholder’s financial plan was stable. Enron had used a similar system to cover up significant profit loss to employees and customers alike.

Despite the severity of the allegations, Guggenheim is standing its ground in the lawsuits, calling the allegations inaccurate and false. Legal representatives for the company state that each annuity investment was conducted according to the customer and to the law, saying that the annuities were completely legal and properly disclosed. All service contracts between Guggenheim and its subsidiaries were approved by the company’s regulators, and nothing underhanded was done.

Schulzki and Whitmore seek class-action status for their lawsuit in order to represent anyone who has bought an annuity from Security Benefit Life Insurance Co., Guggenheim Life and Annuity Co, or Equitrust Life Insurance Co. since Jan. 01, 2010.

The plaintiffs are asking for an unspecified amount of financial damages, tripled under the federal racketeering law.

Overview of Annuity Fraud Complications

An annuity is an insurance product which would ideally pay a steady income stream during retirement, which would steadily rise if the investment was made in the right company. This makes annuities very popular for the elderly, but their complex financial nature also makes them easy tools for exploitation.

While annuities can be useful and fruitful investment options under the right guidelines, some insurance agents and individuals have begun using annuities to drain the finances of unsuspecting elders, who were tricked into believing they were making a smart investment choice.

Oftentimes, the elders are tricked into draining their financial assets to pour into these bad annuities, or unintentionally give the insurance companies free access to their cash reserves.

Annuity fraud is becoming an epidemic problem throughout the United States, so legal experts encourage people to be aware of their rights.  Common signs that the insurance agent might by selling an annuity scam include:

• The 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.

Annuity Fraud Litigation Movement

This Guggenheim lawsuit is, Whitmore v. Guggenheim Partners LLC, Case No. 14-cv-00948, in the U.S. District Court of Northern Illinois, Chicago Division.

Free Annuity Lawsuit Evaluation

If you believe that you or a loved one have been the victim of an Annuity financial scam, 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 Annuity 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 Annuity attorneys working this investigation do not get paid until you do.