David Abraham, 48, of Santa Barbara, Calif., has been charged on with one felony count of grand theft for allegedly stealing more than $1.3 million, the California Department of Insurance reported. If convicted, Abraham could face up to five years in prison.
Abraham, a licensed life insurance agent and former employee of Brown & Brown Insurance in Santa Barbara, is charged with twisting and churning annuity policies of his clients, many of whom are senior citizens. After selling a client an annuity policy, Abraham would allegedly wait until a policy was at least one year old so that he would retain a commission, and then transfer the annuity policy to another company. The transfer would result in a sizeable commission for Abraham, while the policyholders faced surrender charges of more than 10 percent of the principal.
He allegedly repeated this scheme until he had made more than $1.3 million in commission payments. When asked about the surrender charges by clients, Abraham purportedly told them that the new companies would pay bonuses to make up for the surrender penalties. The unsuspecting clients were not informed that they needed to maintain their annuities for a specified period of time in order to realize the bonuses. Abraham’s clients suffered surrender penalties amounting to $1.9 million as a result of his alleged actions, while he made more than $1.3 million in commissions.
CDI investigators also discovered that Abraham allegedly changed his clients’ mailing addresses to his home address on the new annuity policies to conceal his actions. It is also alleged that Abraham fabricated policy statements with inaccurate figures using the original annuity company letterhead.
The Santa Barbara County District Attorney’s Office is prosecuting this case.
Was this article valuable?
Here are more articles you may enjoy.