A Decatur, Illinois, independent insurance agent has pled guilty to charges that he defrauded his clients of more than $250,000 from February 2011 to July 2016, according to a press release from the Central District of Illinois U.S. Attorney's Office.
James P. Smith, 60, appeared before Chief U.S. District Judge James E. Shadid in Peoria. Sentencing is scheduled on July 20, 2017. The Federal Bureau of Investigation and the Macon County Sheriff's Office conducted the investigation.
Used money for his own benefit
Smith acted as an independent agent at the Prairie State Insurance Agency in Decatur. According to court documents and statements made in court, from at least February 2011 through July 2016, Smith solicited clients to purchase insurance, including whole life insurance, and financial products, including annuities.
As part of the scheme, Smith admitted that he falsely represented the minimum rate of return the annuities could obtain for his clients. Instead of investing clients' money in insurance, annuities, or other financial products, as promised, Smith used the money for his own benefit.
Smith requested that clients make payment to "MSM, Inc.," which he represented was the insurance company or the investment company for the annuity the clients were purchasing. In fact, as Smith knew, MSM, Inc., was actually Main Street Marathon, a gas station in Mt. Zion, Illinois, that Smith owned. Rather than use clients' funds as represented, Smith used the money to finance the gas station and to make mortgage payments on his personal residence.
Canceled policies without permission
Smith also admitted he canceled or cashed out clients' insurance policies or annuities without their knowledge or permission, and then used the cash value and/or future premiums or payments for personal expenses. Smith admitted he used the money to pay his attorney's fees, personal bankruptcy fees, and to make purported annuity payments to other clients to prevent them from discovering that he had not purchased their annuities as promised.
For each of the offenses, mail fraud (two counts) wire fraud (one count), and money laundering (one count) the maximum penalty is 20 years in prison.
Related:
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.