This is a long story, so thank you to anyone who takes the time to read through. I will strive to tell this in "Cliff's Notes" form. I am also going to leave this as anonymous as possible by leaving out my full name and state of residence. Hopefully that is understandable.
My parents began working with a financial planner who introduced the “Infinite Banking Concept” to them sometime around the year 2000. They did well with this concept and decided to venture in to the planner’s next big thing, which was hard lending. This started to happen around 2003. From then until 2012 I was never a customer of this agent, but, in hearing my parents say they were happy, had referred probably 10-20 people to this agent, many of which purchased policies, at least. In 2012 I saw the agent at a family gathering (agent was THAT close to my family) and they offered to meet with me to discuss a life policy, which I did without thinking twice. We went over the numbers and drew up the policy and, as I was leaving, the agent said, “your family has always been really great to me, so I’d like to do this thing to help you get started. I AM GOING TO PAY YOUR MONTHLY PREMIUMS FOR THE FIRST YEAR.” My premium is $810 per month for about 650,000 of whole life insurance. At the time, I justified this without thinking twice about it and just believed the agent was basically giving up their commission as a favor. Given the long term existing relationship, it didn’t seem all that off to me. When I worked in sales, many years ago, I gave up commission so that friends and family could enjoy a better price on what I was selling. It simply didn’t occur, at that time, that there were probably regulations involved – because I saw the agent as trustworthy.
Fast forward about a year and the agent approached me about another policy, this time telling me that they would get a cruise or something if they got a few more policies written before the end of the year (mind you, it’s the second week in December) and that they would pay this policy up to two years. If I could not afford, or didn’t want it at that point, I could cancel the policy. I relented.
Fast forward 1.5 years and I am getting phone calls from friends that the agent is not paying them on their “hard lending” investments. The agent was also not getting back to them right away as previously. When the agent did get back the people would be told that their investment was rolled over into a new opportunity and would be there for 1-2 years, BUT they would give them a slightly better rate than previously offered if they would leave their money invested. Many times people would be ok with this arrangement and the agent showed up at another one of my family functions about a month later. We talked for a while, as usual, and the agent offered me an explanation for what was going on with the hard lending business. Basically it was some made up story that seemed believable enough and, at the end of the event asked me if I knew anyone else that would benefit from their services. I had decided that until I hear from some of my friends I would not give out any other names so I told the agent that nobody was coming to mind, but that I would think about it. The agent then gave me a verbal invite to their office holiday party, which I have attended for the last couple of years. I went and ran into the same people I always had previously and everything seemed normal. Soon thereafter, my parents were telling me that they were not being paid on the money they had invested in hard lending. My heart stopped. Then they started telling me about their friends who are all having the same problem. They told me it had been happening in waves for about a year or so, but didn’t want to say anything until they were fairly sure something was up. It immediately occurred to me that we were involved in a ponzi – at least I was at 60% certainty. I told my parents and friends to start asking for their principal back, but to only ask for very small amounts and see what happens. Some people got a little and, lucky me, my spouse and I got the $10,000 back that we invested, which I believe was calculated – can’t screw the people who potentially know other investors.
In April of the next year, a friend of mine who took out a policy with the agent told me the agent gave him some bogus advice about taking money out of an IRA or some other retirement account – that if he had something to put it into, he could write it off. Unfortunately, he could not write it off even though he had purchased an apartment building to renovate. He lost somewhere around $40,000 to the fed because the amount of money he pulled out placed him over the threshold for the AMT.
Fast forward to August 2016 and we get word the agent has been investigated by the Attorney General’s office and was shut down two months earlier. Since then the agent has plead guilty and is awaiting sentencing – which has been continued for some time now.
When I heard the agent was shut down, suddenly I realized I better look into some things – he did illegally pay for my premiums as I live in a state that makes it unlawful for the agent to do that. I also realized I probably owe income tax on that money. And I also realized that other people’s money probably helped pay for the first or second (or both) policies and that is what makes me ill. We have a friend of the family who lost her husband, but didn’t lose everything else because he had the foresight, years before becoming ill, to take out a ton of insurance on himself. He was in his 60’s when he passed, but he left her with more than a million – nearly all of which she gave to a hard lending scam. She has next to nothing now and is in her late 70’s.
We have another friend who lost around $300,000 and several others who have experienced varying degrees of loss.
So there is the back story. I am going to cancel this policy and I am wondering just one thing:
The money that was given to me I would like to pay into the restitution fund for these victims, but I do not have the $10,000 on the first policy or the $6,000 for the second. I’ve paid in close to $50,000 since I have taken out the policy – is there any viable way to walk away with what I’ve put in minus what wasn’t mine in the first place? If so, who in an insurance company would I have to speak with?
One other question I have is would they pay on the policy should something happen to me or would the fact that the agent gave me the monthly premiums make my policy invalid. I am asking this as a way to find out if that would be grounds for a full refund minus restitution.
By the way – the agent was not a licensed financial planner. The agent was licensed to sell life insurance, but nothing beyond that. The odd thing – no record about the agent’s license being revoked. Weird.
Well that’s it for now. If there is something I can clarify, please let me know and thank you, once again, for reading about this massive screw up I unknowingly became a part of.
Thank you.
My parents began working with a financial planner who introduced the “Infinite Banking Concept” to them sometime around the year 2000. They did well with this concept and decided to venture in to the planner’s next big thing, which was hard lending. This started to happen around 2003. From then until 2012 I was never a customer of this agent, but, in hearing my parents say they were happy, had referred probably 10-20 people to this agent, many of which purchased policies, at least. In 2012 I saw the agent at a family gathering (agent was THAT close to my family) and they offered to meet with me to discuss a life policy, which I did without thinking twice. We went over the numbers and drew up the policy and, as I was leaving, the agent said, “your family has always been really great to me, so I’d like to do this thing to help you get started. I AM GOING TO PAY YOUR MONTHLY PREMIUMS FOR THE FIRST YEAR.” My premium is $810 per month for about 650,000 of whole life insurance. At the time, I justified this without thinking twice about it and just believed the agent was basically giving up their commission as a favor. Given the long term existing relationship, it didn’t seem all that off to me. When I worked in sales, many years ago, I gave up commission so that friends and family could enjoy a better price on what I was selling. It simply didn’t occur, at that time, that there were probably regulations involved – because I saw the agent as trustworthy.
Fast forward about a year and the agent approached me about another policy, this time telling me that they would get a cruise or something if they got a few more policies written before the end of the year (mind you, it’s the second week in December) and that they would pay this policy up to two years. If I could not afford, or didn’t want it at that point, I could cancel the policy. I relented.
Fast forward 1.5 years and I am getting phone calls from friends that the agent is not paying them on their “hard lending” investments. The agent was also not getting back to them right away as previously. When the agent did get back the people would be told that their investment was rolled over into a new opportunity and would be there for 1-2 years, BUT they would give them a slightly better rate than previously offered if they would leave their money invested. Many times people would be ok with this arrangement and the agent showed up at another one of my family functions about a month later. We talked for a while, as usual, and the agent offered me an explanation for what was going on with the hard lending business. Basically it was some made up story that seemed believable enough and, at the end of the event asked me if I knew anyone else that would benefit from their services. I had decided that until I hear from some of my friends I would not give out any other names so I told the agent that nobody was coming to mind, but that I would think about it. The agent then gave me a verbal invite to their office holiday party, which I have attended for the last couple of years. I went and ran into the same people I always had previously and everything seemed normal. Soon thereafter, my parents were telling me that they were not being paid on the money they had invested in hard lending. My heart stopped. Then they started telling me about their friends who are all having the same problem. They told me it had been happening in waves for about a year or so, but didn’t want to say anything until they were fairly sure something was up. It immediately occurred to me that we were involved in a ponzi – at least I was at 60% certainty. I told my parents and friends to start asking for their principal back, but to only ask for very small amounts and see what happens. Some people got a little and, lucky me, my spouse and I got the $10,000 back that we invested, which I believe was calculated – can’t screw the people who potentially know other investors.
In April of the next year, a friend of mine who took out a policy with the agent told me the agent gave him some bogus advice about taking money out of an IRA or some other retirement account – that if he had something to put it into, he could write it off. Unfortunately, he could not write it off even though he had purchased an apartment building to renovate. He lost somewhere around $40,000 to the fed because the amount of money he pulled out placed him over the threshold for the AMT.
Fast forward to August 2016 and we get word the agent has been investigated by the Attorney General’s office and was shut down two months earlier. Since then the agent has plead guilty and is awaiting sentencing – which has been continued for some time now.
When I heard the agent was shut down, suddenly I realized I better look into some things – he did illegally pay for my premiums as I live in a state that makes it unlawful for the agent to do that. I also realized I probably owe income tax on that money. And I also realized that other people’s money probably helped pay for the first or second (or both) policies and that is what makes me ill. We have a friend of the family who lost her husband, but didn’t lose everything else because he had the foresight, years before becoming ill, to take out a ton of insurance on himself. He was in his 60’s when he passed, but he left her with more than a million – nearly all of which she gave to a hard lending scam. She has next to nothing now and is in her late 70’s.
We have another friend who lost around $300,000 and several others who have experienced varying degrees of loss.
So there is the back story. I am going to cancel this policy and I am wondering just one thing:
The money that was given to me I would like to pay into the restitution fund for these victims, but I do not have the $10,000 on the first policy or the $6,000 for the second. I’ve paid in close to $50,000 since I have taken out the policy – is there any viable way to walk away with what I’ve put in minus what wasn’t mine in the first place? If so, who in an insurance company would I have to speak with?
One other question I have is would they pay on the policy should something happen to me or would the fact that the agent gave me the monthly premiums make my policy invalid. I am asking this as a way to find out if that would be grounds for a full refund minus restitution.
By the way – the agent was not a licensed financial planner. The agent was licensed to sell life insurance, but nothing beyond that. The odd thing – no record about the agent’s license being revoked. Weird.
Well that’s it for now. If there is something I can clarify, please let me know and thank you, once again, for reading about this massive screw up I unknowingly became a part of.
Thank you.
