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Commerce Department Files Statement of Charges in Senior Fraud Swindle Case


Thu, Mar 20th, 2014
Posted in All State of Minnesota

SAINT PAUL, MN – Late yesterday, the Minnesota Department of Commerce filed an order to show cause and statement of charges against Barbara Stark and Susan Walker, former Ameriprise Financial Services agents. The outcome will determine civil penalties and other disciplinary actions. The statement of charges alleges that Stark and Walker financially exploited vulnerable adults and elderly consumers by engaging in a willful pattern of stealing the retirement accounts of their victims to fund a lavish lifestyle that included multiple vacations, payments for a Lexus, private school tuition and rent.



“The Commerce Department considers fraud, abuse and predatory acts against seniors to be unconscionable, and in this case our investigation found that Stark and Walker gained their clients trust and swindled them out of their life savings,” said Commerce Commissioner Mike Rothman. “This case really hits home – being defrauded tens of thousands of dollars late in life leads to financial ruin, and we will continue to work hard to protect all consumers from financial fraud and abuse to stop it in Minnesota.”



The case was referred to the Commerce Department by the Attorney General’s Office to investigate suspicious withdrawals from several Minnesota senior citizens’ annuity accounts. The Department’s statement of charges alleges that the transactions were conducted without the knowledge of the account owners and the money was deposited into bank accounts controlled by Stark and Walker.



Commerce’s investigation revealed that Stark and Walker relied on their various professional roles as an insurance agent, notary public, certified financial planner, and securities agents to meet their victims. Subsequently, the allegations state they made unauthorized withdrawals from retirement accounts, opened bank accounts in their clients’ names without permission, and forged signatures on numerous securities and insurance related documents. The elaborate scheme resulted in excess of $930,000 allegedly stolen from elderly clients and their former employer.



Annuities are a common investment used in retirement planning or during retirement, but annuities are often difficult for consumers to understand and therefore, are often used to scam senior citizens. To protect investors, especially Minnesota’s seniors, selling unsuitable annuities is against the law. In this case, Stark sold one of the victims, an 89 year-old, two annuities totaling $75,500 for which agents are paid a commission. This is an unsuitable investment product for a client this age.



In addition, the department’s investigation documented that roughly one year after selling the annuities, Walker opened a bank account and submitted paperwork to the investment company holding the annuity to change the 89 year-old victim’s contact information to Walker’s address. The statement of charges further states that over a nine-month period, funds from the two annuities were withdrawn by Stark and Walker using forged documents submitted to the investment company, faked checks with the victim’s name, and purported documents signed by the victim, and notarized by Stark.



Similar tactics were allegedly used to empty the retirement account of a 72 year-old Minneapolis victim. After a $59,808 annuity was purchased from Stark, change of address forms were submitted to the investment company and thereafter the withdrawals began. In hand-written notes, various excuses were used to request the funds and justify the surrender charges incurred – stating the funds were needed for a “nursing home bill” or “investing in my child’s business venture.”



Stark and Walker allegedly defrauded at least 21 clients while working at Ameriprise between 2008 and 2013. Ameriprise calculated the amount of loss resulting from Stark’s and Walker’s fraud and deception as $798,340 and has reimbursed those clients. Included in the statement of charges, is a transaction list detailing the withdrawals from the bank accounts set up by Stark and Walker to hold the stolen funds. The list includes 157 fraudulent deposits, wire transfers, and cash distribution requests allegedly made by Stark and Walker. The transactions out of the stolen funds include: thousands of dollars spent on cruises, hotels, airfare, ATM withdrawals, and even two payments to the Certified Financial Planner (CFP) Board of Standards.



The Minnesota Department of Commerce is here to help



The Minnesota Department of Commerce licenses and regulates insurance agents and brokers, notary publics, and registers securities.



To protect yourself against insurance policy mill scams, check the Department’s License Lookup Tool to make sure the company or individual you are or will be working with is licensed to do business in Minnesota.

The Minnesota Department of Commerce receives tips from companies and individuals that suspect fraud. Minnesotans can report insurance fraud anonymously by calling the Commerce Fraud Bureau at 1-888-FRAUDMN (1-888-372-8366).

If you feel you might be the victim of a scam involving one of these areas, contact the Minnesota Department of Commerce Consumer Protection Line to file a complaint and work with an investigator



The Minnesota Department of Commerce Consumer Protection Line can be reached by email at consumer.protection@state.mn.us or by phone at (651) 539-1600 or (800) 657-3602 in Greater Minnesota.

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