Editor's note: This story has been updated to reflect comment from the IRS
The self-described "Annuity King" escalated his battle with federal authorities with a lawsuit alleging "rogue, out-of-control, above-the-law" conduct by agents who investigated him.
Phillip Wasserman, 64, faces up to 20 years in prison on mail fraud, wire fraud and tax evasion charges from alleged improper annuity sales. Last week, a Florida federal judge continued the case until the February 2022 trial term.
The government seeks a money judgment of at least $6.3 million, court documents say, the proceeds of the charged criminal conduct.
Wasserman is mounting an aggressive defense. His team has asked the court to admit into evidence a lie detector test administered by a former FBI agent, and Wasserman has said he plans to call between 265 and 600 witnesses at his trial.
His civil suit filed last week alleges improper conduct by two Internal Revenue Service agents, and a Florida Department of Financial Services investigator.
"The most remarkable facet of this case is that agents who have themselves committed dozens, if not hundreds, of criminal acts in the form of felony violations," the lawsuit reads. "This is pure character assassination by rogue agents who have ignored the law."
Wasserman's accusations include:
IRS agents making "false, misleading, defamatory and disparaging statements" to witnesses during their investigation.
IRS agents and a state DFS investigator revealing Wasserman's tax return information in violation of federal law.
Submitting affidavits in support of warrants that omitted key information.
A spokeswoman for the Florida DFS said the state does not comment on active litigation.
“We will decline comment on the pending litigation, but what I can tell you is that our special agents execute their authorities with the highest level of integrity and professionalism," said IRS Criminal Investigation Special Agent in Charge Brian Payne. "Their work is focused on pursing justice and preserving confidence in the U.S. tax system.”
A motion for sanctions filed by Wasserman's team was denied by a federal judge, court documents say. The defendant is filing an amended motion for sanctions, the civil lawsuit said.
Wasserman's team suffered a setback last week when a judge denied a motion to quash a subpoena seeking Diane Wasserman's bank records for transactions through three JP Morgan accounts and two PNC accounts. She is Wasserman's wife, court documents say.
In July, Kenneth Murry Rossman, 63, Wasserman's co-defendant, accepted a plea deal.
According to court documents, Rossman pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud, and one count of "aiding and assisting the preparation and filing of fraud and false tax returns." The two counts carry a maximum of eight years behind bars.
In exchange for the plea, Rossman "agrees to cooperate fully" with the government "in the investigation and prosecution of other persons, and to testify," court documents read.
An initial indictment unsealed in June 2020 charged Wasserman and Rossman with conspiracy to commit wire fraud and mail fraud, as well as substantive counts of wire fraud and mail fraud. A superseding indictment in November 2020 tacked on charges of filing false income tax returns to the wire fraud and mail fraud charges.
Wasserman has operated investment businesses in the Sarasota, Fla., area for years under various names, including Phillip Roy Financial Consultants and Phillip Roy Financial Services. He has held investment seminars about annuities and life insurance attended by thousands of Florida seniors.
Rossman, a certified public accountant and licensed insurance agent, solicited investors and prepared tax returns that concealed negative tax information from both the investors and the Internal Revenue Service, prosecutors said.
The first indictment claimed Wasserman's new insurance venture called FastLife convinced elderly investors to liquidate traditional investments, and to borrow funds against their life insurance policies, to generate cash to put into the new business.
Those investors were not told about surrender fees and other costs associated with the liquidations, court documents say. Wasserman used investors' money to make payments to earlier investors in the FastLife venture, as well to as victim-investors in his earlier hedge fund and real estate fund ventures, the U.S. Attorney's Office in Tampa said.
In court documents, prosecutors allege that Wasserman used some of the investors’ money to fund a lavish lifestyle that included luxury residences, high-end vehicles, jet skis, jewelry, entertainment, gambling, retail shopping, home improvements, personal insurance and other expenses.
Wasserman denied that any money was spent and said he can account for all $6.3 million. Wasserman's defense team includes several retired criminal investigators or former FBI agents who are expected to testify about the financial dealings in question.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.