Kenneth Murry Rossman, 63, formally accepted a plea deal this afternoon in a federal fraud case that includes co-defendant and prolific annuity seller Phillip Roy Wasserman.
The self-described "Annuity King" in marketing materials, Wasserman, 64, maintains his innocence and is expected to go to trial in the fall in a Florida court. If convicted, he faces up to 20 years in prison on mail fraud, wire fraud and tax evasion charges.
The government seeks a money judgment of at least $6.3 million, court documents say, the proceeds of the charged criminal conduct.
"The government is going to be very badly embarrassed at this trial," Wasserman told InsuranceNewsNet via text today. "It's an absolute frame job on behalf of an above-the-law IRS agent and the government."
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.
Rossman admitted receiving $203,428 in income that was not reported on his tax returns. Rossman's plea deal satisfies all of his charges in the case, court documents say.
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. 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.
Lavish Lifestyle Alleged
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.
Wasserman also passed a lie detector test administered by a former FBI agent, he said, and plans to call between 265 and 600 witnesses at his trial.
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.
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