An insurance agent used a CT woman as what her family called ‘a bank.’ $530,000 hasn’t been paid back

John Michael Horvath, formerly of The Insurance Education Center Agency, pleaded guilty in July to defrauding at least eight victims out of more than $1.18 million between July 2015 and April 2021, according to the U.S. Attorney’s office.

“It started a few years ago,” said Chris Hunt of California, brother of Horvath’s main victim, a cancer survivor.

“My sister was having memory issues and had been for a while and it was getting more serious, so we called up her alleged financial adviser Jack Horvath and said, how much is left in the fund? And he started prevaricating and saying, Oh, I can’t really tell you that, I’m not at my office right now, etc., etc. So that’s set off the alarm bells,” Hunt said.

The Courant is keeping Hunt’s sister’s name and location anonymous to protect her privacy and safety.

Horvath had persuaded Hunt’s sister to transfer her Merrill Lynch account to Allianz Life, based in Minneapolis, which he then used to purchase annuities, Hunt said. Federal authorities also said Horvath advised clients that they could get better rates of return through alternative investments rather than existing annuity contracts.

What Horvath had done was tell Hunt’s sister that her money was doing well, Hunt said. “But after a year, he said, I can get you a better return on your investment if you let me invest it for you.”

He then would ask her to write him checks of as much as $120,000, which he then would use to reimburse his other clients, Hunt said. Federal authorities confirmed Horvath used the money to repay earlier victims.

Horvath finally admitted to the lawyer who had referred Hunt’s sister to him that the money was gone, Hunt said. “He said that he couldn’t return the money because it wasn’t there. He had spent it,” Hunt said.

Hunt said Horvath would prefill out a form from Allianz Life for a withdrawal of $30,000 or $50,000, which would be deposited into her checking account, then Horvath would ask her to write him a check for that amount.

“So that happened multiple times. (She) never told me or her kids that she was doing this,” Hunt said.

“We had no idea that she was cutting checks like that all the time. And the irony is (my sister is) not wealthy,” Hunt said. “The money came from basically the insurance on her husband’s life. Her husband … suffered horribly from ALS the last two years of his life, but since he knew that was happening he kept working hard.”

Once Horvath confessed to the lawyer who had referred him to Hunt’s sister, the family hired a lawyer. Horvath then began to stall and ultimately admitted to stealing $530,000, Hunt said.

“So finally, the Department of Justice, the FBI got involved and they chased his down and found out that in addition to my sister, seven other people from Allianz Life annuities had been defrauded, all to smaller amounts,” Hunt said. This was confirmed by the U.S. Attorney’s office as well.

“(My sister) seemed to have been the bank. …  When one of the other seven victims needed money, Horvath would go to my sister’s fund because that was the largest one he controlled and just take money out of that. So it was a classic Ponzi scheme of robbing Peter to pay Paul.”

Hunt said they never got any money from Horvath or from Allianz Life. Horvath was an independent agent, not an employee of Allianz Life, but Hunt said the company said it could not remove his name from his sister’s accounts.

According to a statement from U.S. Attorney Vanessa Roberts Avery, Horvath also failed to pay income taxes on his fraudulent income, totaling $267,739 for the 2015 through 2020 tax years.

He pleaded guilty to one count of wire fraud, which carries a maximum prison term of 20 years, and one count of tax evasion, which carries a maximum term of five years.  He is due in court Feb. 15.

The FBI and the Internal Revenue Service’s Criminal Investigation Division investigated the case.

Horvath could not be reached for comment. Allianz Life did not return a call seeking comment.

Ed Stannard can be reached at [email protected]. 

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