The state has filed suit against a Bellevue insurance agent and his two business partners who, it says, preyed on elderly consumers and duped them out of thousands of dollars. Many of the 30-plus victims were widows, usually over 80-years-old.
According to court papers, since 2007, the defendants, Henry William “Bill” Dailey, Janet Sparks, and Deborah Higgins of TEAM Services LLC, and TEAM Insurance Services LLC sold reverse mortgages, annuities and living trusts to senior citizens.
Though none of the products or loans is individually illegal, the state says the lawsuit is about the lack of product disclosures; the deceptive sales tactics used by the defendants to sell reverse mortgages, annuities and living trusts; and the unfair representations made concerning estate documents and investment advice.
The defendants dropped by seniors’ homes unannounced, claiming to provide financial and estate planning services that would improve the seniors’ financial circumstances, the court document says. They made repeated visits to cultivate a friendly and trusting relationship — without the seniors’ relatives, friends, or financial advisors present.
“It is deplorable to prey on our most vulnerable consumers,” said Bob Ferguson, Washington state Attorney General. “It appears the defendants abused seniors’ trusting nature to maximize their commissions at their victims’ expense. The Attorney General’s Office will fight to stop this scam.”
The defendants allegedly convinced seniors to take out a reverse mortgage or refinance an existing reverse mortgage to extract the maximum amount of the seniors’ home equity.
Immediately after the mortgage proceeds were received by the senior, the defendants revisited their victim and convinced the senior to invest mortgage proceeds in annuity products.
The defendants received additional commissions on the annuity sales. They failed to disclose the substantial surrender penalties seniors would pay if they needed to use their money tied up in annuities.
In numerous cases the defendants included false information in the annuity applications so they would be approved by the insurance companies. Several victims learned their signatures had been forged in the applications, the state said.
The state believes the defendants advised seniors to liquidate stocks, certificates of deposits, and other investments to buy additional annuities. None of the defendants are licensed investment advisors.
The defendants also sold seniors a living trust, typically paid out of the mortgage proceeds. None of the defendants are licensed attorneys who can create estate documents such as living trusts.
After a year, the defendants often revisited their victims and allegedly convinced them to surrender the first annuities to re-invest that money in annuities with yet another insurance company. The defendants received additional commissions while the senior lost thousands of dollars in surrender penalties.
Through all these schemes, the defendants received hundreds of thousands of dollars in commissions from reverse mortgage loans, annuity sales and estate document sales.
