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We’re all in the jailhouse now

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Justice delayed is justice denied. That is familiar phrase rich in meaning and one of those that only makes complete sense when it is staring you in the face.

That’s the situation for Alan S. Lewis right now, who is in a California jail awaiting a June 23 trial. He is facing 29 felonies and one misdemeanor for selling annuities with surrender charges. He made repeated sales to clients and the Riverside County district attorney is accusing him of twisting. Except, instead of being brought before the state Department of Insurance, he is being charged with embezzlement, grand theft and burglary. The burglary is because he visited clients in their home.

Many observers from the insurance sales community have questioned the sales themselves but are also baffled by the criminal charges.

In the meantime, Lewis’ life is on hold and certainly forever changed. He was already battling back from some difficult times in his life when he was arrested and thrown in jail in late February. He is still incarcerated, facing a constant threat of violence for lack of $600,000 bail.

Lewis was supposed to go to trial June 9, but the prosecutor wasn’t ready. So it’s been postponed to June 23. That prosecutor and the judge who allowed the continuance left the courtroom unshackled and went home to their families that day and every day that Lewis sits in jail.

If he is acquitted, he won’t get that time back and won’t be able to erase the episode from the record on the Internet. That’s also the situation that Glenn Neasham faces.

Neasham was also an annuity agent in California who was accused of theft in a sale. He sold a fixed index annuity to an 83-year-old who was said to have dementia. Neasham and two of his assistants said they did not notice cognitive impairment. The prosecutor did not prove that Neasham knew.

People were amazed that Neasham was convicted in 2011. They said he would win on appeal. But those people got to continue their business and enjoy life with their families. Neasham lost his license, home and had to move into a house provided by his in-laws. He and his family had to subsist on public assistance.

Neasham eventually won his appeal in 2013. In fact, judges eventually said the conviction was so ridiculous that they took the unusual step to “depublish” the original decision. But the state didn’t restore his life.

The difference between these cases and theft cases that advisors usually face is that Lewis and Neasham were engaged in legal sales. In typical theft, agents set up phony identities or steal directly from impaired clients and so on. Those are people who were flat-out stealing. Lewis and Neasham were selling annuities as thousands upon thousands do every day. Some might question some of their methods and that would usually be a question for regulators to answer.

Some say they would never engage in a questionable sale because they are always ethical and hold their clients’ interest above all. But ethics are subjective. What is one person’s swap for a better annuity deal is another’s case of twisting.

It must be a little scary for annuity agents in California these days to know that they could be wearing chrome bracelets on the way to jail any day now. As one commenter on our site said: “All agents better start working out and learning self-defense because it won’t be easy in prison.”

 

 

 

 

 

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Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Connect with Steve →

  • http://batman-news.com John

    i said that!!!

  • John Olsen

    Both Glenn Neasham and Alan Lewis are victims of zealous prosecutors seeking to gain points with those who hate annuities while remaining almost entirely ignorant of how they work. Neasham’s prosecutor actually stated that she “doesn’t like annuities”. It’s a pity that no one asked her “which types?” Fixed immediate annuities, variable deferred annuities, fixed “declared rate” deferred annuities? fixed index deferred annuities? variable deferred annuities? Does she even know that those various types exist (much less, what distinguishes each from the others)?

    To suggest that the presence of surrender charges constitutes “theft” (a charge in both prosecutions) is absurd on its face. If one believes that, then one is obliged to conclude that anyone who sells a “B” share mutual fund or almost every universal life policy out there is a thief. And if entering the home of a consumer with the intention of selling a contract containing surrender charges constitutes “burglary” (as Lewis’ prosecutor charges), then every agent or registered rep selling “B” shares and/or UL policies is a “burglar”.

    Annuity sales abuses exist. We all know that. To reduce those abuses requires intelligent, diligent enforcement of REASONABLE suitability statutes. It does not require that we release the inmates to run the asylum.

  • http://www.justicedenied.com Howell Woltz, TEP

    The Speedy Trial Act of 1974 (18 USC 3161, et seq) requires trial to begin within 70 days or prisoner to be released within 90 days absent “excludable delays” which do not include the prosecutor not being ready.

    Article Six of the Constitution requires states to follow this law as well, and Amendment Six requires a “speedy trial” as defined in that act.

    Unfortunately, government courts and prosecutors no longer follow the law themselves, and have had immunity for such crimes since 1967 (see Pierson v. Ray). We’re trying to fix that, as explained in the TED talk below, and would appreciate your help.

    Would you sign our petition to Congress to restore oversight of bad government actors with an Office of Ombudsman? This TED talk explains the concept. Thanks if you can help. Howell Woltz

    https://m.youtube.com/watch?list=PLLCl0ui2-7mRAXgZXdWPp0J4Nj153fVo1&v=BPvfi-Je97o

    Attachments area

    Justice Denied — Why We Need an Office of the Ombudsman | Howell W. Woltz | TEDxCreativeCoast

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