Mass AG Squeezes $130K Refund From Mortgage Broker, Insurance Agent In Alleged Racket That Duped Elderly Homeowners Into Mortgaging Their Homes & Investing Proceeds In Crappy Annuities; Settlement Adds To Nearly $900K Received In Connection w/ Previously-Resolved Allegations Against Insurance Underwriter For Failing To Prevent Ripoff Due To Ineffective Employee Supervision

From the Office of the Massachusetts Attorney General:

• Massachusetts seniors will receive more than $130,000 in refunds as a result of a settlement with a mortgage broker, its employee and an insurance agent that resolves claims they induced elderly clients to take out reverse mortgages and invest the proceeds in unsuitable variable annuities, Attorney General Maura Healey announced today [April 11].
  
  This settlement resolves allegations from a lawsuit filed by AG Healey in August 2015 against mortgage broker Direct Finance Corp., its employee Daniel Matthews, and insurance agent James Moniz.
  
  “We found that these defendants took advantage of elderly homeowners who spent decades building equity in their homes,” said AG Healey. “My office is focused on stopping the financial abuse of seniors.”
  
  The AG’s lawsuit alleged that while employed by John Hancock Life Insurance Company (U.S.A.), Moniz developed an association with Matthews to induce elderly clients to take out reverse mortgages through Direct Finance and invest the proceeds in unsuitable variable annuities. John Hancock terminated Moniz for conduct uncovered during the investigation.
  
  As a result of this settlement, affected consumers will receive a total of $137,500 in refunds that will be distributed by the AG’s Office. Eligible consumers will be contacted by the AG’s Office.
  
  In addition to monetary relief, the settlement imposes restrictions on Moniz, Matthews, and Direct Finance to prevent improper association between the origination of reverse mortgages and the investment of the proceeds in annuities or other investment products. The defendants are also prohibited from misrepresenting the sources of investments or investment intentions of their clients.
  
  The AG’s Office previously settled allegations with John Hancock that it unfairly failed to effectively supervise Moniz, permitting him to sell unsuitable variable life insurance policies, variable annuities, and other insurance and financial products. In September 2014, John Hancock paid nearly $900,000 to seniors in Massachusetts to resolve those allegations.

Source: Seniors to Receive More Than $130,000 in Settlement With Insurance Agent and Mortgage Broker Over Deceptive Practices (Refunds to Supplement Nearly $900,000 Paid by the Insurance Agent’s Former Employer).