Detectives from the California Department of Insurance (“CDI”) have arrested two persons for allegedly conspiring to commit financial elder abuse against a Santa Barbara resident. Detectives arrested insurance agent Erica Salda at her residence in Santa Barbara, and financial advisor Wendy Foster at her residence in Oxnard.
Ms. Salda and Ms. Foster allegedly targeted a long-time resident of Santa Barbara over a 10-year period. Beginning in 2005, the then 89-year-old victim had a multi-million dollar investment portfolio that she expected to provide her income for the rest of her life, the CDI explained.
“It is repugnant that professionals in positions of great trust, like an insurance agent and financial adviser, would target and steal from a vulnerable senior,” Insurance Commissioner Ricardo Lara said in a statement. “While the vast majority of licensed agents do not commit fraud, it is important for consumers and their families to be alert for warning signs of abuse.”
According to the CDI, shortly after meeting the victim in 2005, Ms. Salda and Ms. Foster persuaded her to abandon the licensed professionals who had been managing her estate for years and replace them with Ms. Foster who had no prior experience as a professional fiduciary or attorney-in-fact. Ms. Salda and Ms. Foster then persuaded the victim to liquidate her entire investment portfolio and invest $3,000,000 in two annuity policies, the CDI added.
As alleged, over the next 10 years, Ms. Salda and Ms. Foster conspired to unnecessarily sell an additional 23 annuities to the victim, many of which were purchased without her knowledge or consent. These sales generated insurance commissions for Ms. Salda in excess of $1 million, according to the CDI. During the same period of time, Ms. Foster collected fees exceeding $400,000 for acting as the victim's trustee, the CDI said.
According to the CDI, during the course of their relationship with the victim, Ms. Salda and Ms. Foster failed to disclose material information to her, including the fact that they were engaged in a romantic relationship with each other and that Ms. Foster had declared personal bankruptcy and been sued for fraud by the Federal Trade Commission in the past.
Ms. Salda and Ms. Foster allegedly sought to exert their control over the victim by isolating her from family and friends. As their influence increased, the victim became increasingly dependent upon them to handle her finances and take care of her daily needs, the CDI added. In return, the CDI said, the victim lavished Ms. Salda and Ms. Foster with tens of thousands of dollars in cash gifts and the use of a luxury automobile. The victim also was persuaded to spend thousands of dollars to pay the education expenses for Ms. Foster's children, including $20,000 for one of Ms. Foster's daughters to spend a year abroad studying in China, the CDI alleged.
“Isolating a victim from her trusted advisors and family should be a red flag for potential fraud,” said Commissioner Ricardo Lara.
The CDI's investigation division in Valencia, California, conducted the investigation. The CDI said that it learned about the alleged fraud in 2015 after the victim's family members became suspicious and contacted Adult Protective Services for assistance.
The charges against Ms. Salda and Ms. Foster include conspiracy, theft from an elder adult, and multiple counts of insurance fraud.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].