FINRA fined Prudential Annuities Distributors, Inc. $950,000 for failing to stop a $1.3 million theft from an elderly customer's variable annuity (VA) account. In its decision, FINRA wrote that the firm specifically failed to detect and prevent a fraudulent scheme perpetuated by former LPL Financial sales rep and convicted felon (wire fraud and money laundering) Travis Anthony Wetzel, whom FINRA barred in 2013 and DOJ convicted of fraud in 2014.
The Department of Justice wrote that as a result of the fraud, Wetzel misappropriated $1,282,224 from an 89-year-old widow's variable annuity account, knowing that the elderly client's advanced age and physical condition would "facilitate repeatedly taking money from the client's account."
According to FINRA, Wetzel (CRD #5072345) stole the nearly-$1.3 million from the elder's VA account by submitting 114 forged annuity withdrawal requests to Prudential, with out the client's knowledge, requesting the firm send funds to a third-party account held in the maiden name of Wetzel's wife.
Investigators concluded that Prudential failed to prevent or detect Wetzel's misappropriation of these funds because the firm "repeatedly" failed to adequately investigate red flags indicative of misconduct, and that the firm failed to implement adequate supervisory procedures and WSPs to review and monitor fund transmittal to third party accounts.
The findings indicate that soon after the elderly widow opened her Prudential Annuity Life Assurance Corporation VA, purchased through LPL Financial, then-LPL sales assistant Wetzel submitted forged wire transfer requests directly to Prudential to send money to a third-party account in his wife's maiden name, which he then used for personal benefit.
The investigation states Wetzel forged the requests by cutting and pasting the 89-year-old client's signature onto the 114 forms, and that on average, he sent Prudential four to five fraudulent withdrawal/wire transfer requests totaling about $50,000 per month.
If you have invested in variable annuities or other securities with Prudential, LPL, Travis Anthony Wetzel, or with another firm whose failure to supervise their personnel or to adequately investigate and prevent broker/adviser misconduct—such as the forgery of over 100 outgoing wire transfer requests—has resulted in theft or misappropriation out of your brokerage account or has otherwise proven harmful to your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.