Federal Judge Sentences Former Agent to 10 Years for Defrauding Clients of $4 Million

A judge sentenced a former life insurance salesman to 10 years in prison for defrauding more than 50 of his clients, many of whom were public-school teachers in Philadelphia and its suburbs, of more than $4 million.

Robert H. Sturman will serve his sentence at a facility to be determined within the next 60 days by the Bureau of Prisons, said Assistant U.S. attorney Karen L. Grigsby, who prosecuted the case.

In July, Sturman pleaded guilty to 15 counts of mail fraud, wire fraud, and interstate transportation of stolen property. Prosecutors said over a nine-year period lasting through February 2007, Sturman defrauded his clients through bogus investments and through a ticket "flipping" scam.

Sturman once was a legitimate insurance agent, who had gained the trust of his clients, their families and friends, but began to solicit them to invest in fixed-income investments and other products, court papers said. He would deposit clients' checks, made out to him personally or to his business, Retirement Planning Associates, in his personal account or simply cash clients' checks for his own use. Sturman often dealt in cash and checks amounting to $9,000 or less to avoid filing currency transaction reports and would cash checks at various check-cashing establishments to avoid leaving a paper trail, according to court documents. Sometimes, checks from some victims were endorsed and used to pay other victims, and Sturman gambled, court papers stated.

In another instance, court records showed Sturman duped investors in a ticket-flipping scheme, where he solicited thousands of dollars from clients for tickets to sporting and entertainment events, including luxury-box seats, promising to resell the tickets at a substantial profit. In one example, Sturman promised a client a return of $9,000 a month for an initial investment of $300,000, according to the criminal complaint.

Sturman's scheme unraveled as victims demanded repayment.

When State Police arrested Sturman at a suburban Philadelphia racetrack in April 2008, he called a couple he defrauded of approximately $165,000, and they posted his $10,000 bail after he pledged to them that he would "get his act together," according to court documents. The couple lost the bail money when he skipped a hearing.

In addition to the prison sentence, the federal judge ordered Sturman to pay $4.2 million in restitution.

(By Diana Rosenberg, senior associate editor, BestWeek)