Iowa man charged for defrauding elderly clients, insurance companies

As alleged in the indictment, Zachary James Flaherty, 46, used his position as an insurance agent and annuity salesperson to defraud elderly individuals out of their retirement savings and other monies. To do that, Flaherty misrepresented information to and concealed information from his clients, including information relating to: the returns and bonuses his clients would receive by investing with him; the clients' ability to make penalty-free withdrawals from their investments; and the losses clients could incur.

After the clients agreed to invest money with Flaherty, he continued to misrepresent and conceal information, including information regarding: the returns clients were earning; the amount of money clients had invested with him; and the costs associated with withdrawing funds or cancelling their investments.

In addition, Flaherty encouraged victims to write checks to Flaherty personally and his businesses, including Midwest Senior Solutions Retirement Group, Inc. and Infinity Construction Group, LLC. At the same time, Flaherty misrepresented and concealed information about what he would do with the funds he received from the victims.

Instead of depositing or investing the funds on the victims' behalf, Flaherty deposited the funds into accounts he controlled, and he then used the funds for his own purposes and benefits, including to buy a boat and pay his mortgage and vehicle loans.

The indictment alleges that Flaherty's conduct affected twelve specific victims in Iowa and Nebraska. On behalf of those victims, Flaherty obtained at least thirty-five annuities. Those twelve victims lost over $900,000 in charges, taxes, and fees in relation to their annuities. Those victims also wrote checks to Flaherty personally and his businesses which totaled over $1 million.

Further, the indictment alleges that Flaherty defrauded insurance companies out of commission payments. To do so, Flaherty caused annuity paperwork to be submitted to insurance companies which included misrepresentations and concealed information. Among other things, Flaherty submitted paperwork containing forged policyholder signatures. As a result of the annuity policies issued for the twelve victims in Iowa and Nebraska, insurance companies awarded commissions of over $650,000.

Finally, the indictment alleges that Flaherty conspired with another individual to commit mail and wire fraud. Flaherty and a co-conspirator agreed to execute and attempt to execute a scheme to defraud elderly individuals, primarily individuals in the Kansas City area.

If convicted, Flaherty faces a maximum penalty of twenty years in prison on each count.

United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement.

The Iowa Insurance Division's Fraud Bureau and the Federal Bureau of Investigation are investigating the case, with assistance from the Des Moines Police Department, Clive Police Department, and the Iowa Department of Public Safety's Division of Criminal Investigation. Assistant United States Attorney Kyle Essley is prosecuting the case.

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Original text here: https://www.justice.gov/usao-sdia/pr/clive-man-charged-defrauding-elderly-individuals-and-insurance-companies