Why guaranteed lifetime withdrawal benefit election rates continue to rise.
ALBANY, N.Y., April 27 -- The New York State Department of Financial Services issued the following news release:
Benjamin M. Lawsky, Superintendent of the Department of Financial Services, today announced that two former insurance agents who pled guilty to swindling approximately $400,000 from elderly clients in Western New York by fraudulently changing beneficiary information on annuity contracts have been sentenced to jail time and restitution. Had investigators not stopped the scheme, the two agents had scams in place to steal at least $2.4 million from senior citizens.
Cynthia Gibbons, also known as Cynthia Bulinski, 48, and Kellie Will, 47, were sentenced in Erie County Court as the result of charges filed after an investigation by the New York State Department of Financial Services, the Erie County District Attorney and the East Aurora Police Department.
"These defendants were brought to justice and will serve hard time for defrauding vulnerable senior citizens. We will continue to aggressively investigate and build cases like this to deter the victimization of elderly New Yorkers," said DFS Superintendent Benjamin M. Lawsky. "I want to thank District Attorney Sedita for his office's work in bringing these defendants to justice, as well as the hard work of the East Aurora Police Department."
The investigation that led to the arrest of Gibbons and Will began when a funeral director notified authorities because he was suspicious of their request for a death certificate. The death certificate was for an individual who turned out to be one of Gibbons' clients. They wanted the certificate so they could file a claim for the proceeds of an annuity to which Will had been named as beneficiary.
DFS investigators learned that the two had fraudulently received approximately $400,000 from three annuities Gibbons sold to elderly clients before they died.
Judge Kenneth Case sentenced Gibbons, of Amherst, to one to three years in prison and Will, 47, of Annapolis, Md. and formerly of Angola, to serve 30 days in jail and five years probation. Gibbons has already paid $199,000 in restitution; Will has paid restitution of $98,000 was ordered to pay another $100,000.
The two admitted that Gibbons sold annuities to elderly clients and then changed beneficiary information so that Will received payouts when clients died. The two then split the proceeds.
The victims lived in the Buffalo metropolitan area and in areas south of Buffalo.
DFS investigators also learned that Gibbons and Will potentially could have received approximately $2 million more based on annuities listing Will as beneficiary and sold to eight other senior citizens who were still living.
Gibbons provided financial advice to consumers while employed at a Key Bank in East Aurora for around 10 years and later when she was associated with J.W. Cole Financial, an independent broker/dealer. She was also associated with Cadaret Grant, another investment advisory firm. Will had been a Key Bank employee.
As an investment advisor, Gibbons encouraged elderly customers to take money from their investments and buy annuities. Gibbons earned commissions on the sales and then named Will as a beneficiary without the knowledge of annuitants.
The insurers underwriting the annuities removed Will as a beneficiary on the outstanding annuities after the investigation was begun.
Gibbons pleaded guilty to one count of first degree scheme to defraud and three counts of attempted grand larceny; Will pleaded guilty to one county of first degree scheme to defraud. All of the charges are felonies.
Both Gibbons and Will had been licensed as insurance agents by the Department. Gibbons' license was revoked in December; Will's license expired in 1997.
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