ST. PAUL, Minn. - Two Minnesota insurance agents face a laundry list of criminal charges in connection with an alleged swindle.
Prosecutors in Ramsey County on Friday charged Robert Stanley Hertz and Stephen Anthony Marrone with six counts each of Theft by Swindle, and one count each of Insurance Fraud in connection with multiple incidents of annuities fraud.
A criminal complaint says Marrone, 61, of St. Paul and Hertz, 64, of Willow River replaced annuities with a total value of over $4.2 million. Investigators say the pair made claims to Allianz Life Insurance Company of North America that the policies were new when in fact there were replacement policies.
As a result of their alleged deception, Marrone and Hertz allegedly received commission payments from Allianz totaling $350,000.
"In effect, these individuals recycled policies for their own gain," said Ramsey County Attorney John Choi. "We take financial fraud very seriously and will prosecute these cases vigorously."
To secure the "new" policies, the defendants contacted clients and told them they had a new, "better" annuity product. The defendants promised a 15 to 20 percent bonus on the invested premium, which they said would offset the surrender charges on existing policies.
Once they had the client's buy-in, Marrone and Hertz completed paperwork on their clients' behalf and then submitted the fraudulent applications to Allianz, maintaining they were new policies and not replacements.
Both Marrone and Hertz are charged with 6 counts of theft by swindle and one of insurance fraud. Each count carries a possible 20-year prison sentence.
(Copyright 2012 by KARE. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. )