by Brian Mahany
Massachusetts state securities regulators took action against a stockbroker for defrauding an 83 year old woman suffering from Alzheimers. According to a complaint filed by the Massachusetts Securities Division, Paul Dumochel is charged with securities fraud.
Regulators say that Dumochel learned that an elderly million had $1.5 million in bank accounts and certificates of deposit. They say he preyed on the woman by driving her from bank to bank to “assist” her in liquidating her CD’s. The money, $1,450,000, was then invested in annuities and mutual funds. The net result was that the woman found herself with over $1 million in annuities – a particularly unsuitable investment as she was clearly suffering from Alzeheimers and the annuities carry significant surrender charges for over a decade. In other words, to access all her funds, the ailing woman would have to live to at least 93!
Dumochel earned $63,144 in commissions while the woman had to pay large early withdrawal penalties when she liquidated her CD’s and was denied full access to her money.
Incredibly, Dumochel testified that it was hard to find suitable investments for the woman because most insurance companies would not write an annuity for someone that age. That didn’t stop him, however, from liquidating her bank accounts and lining his pockets.
Dumochel was a registered representative of H. Beck, Inc. Although not charged, they remain responsible for the woman’s losses too. Brokerage firms have a responsibility to properly supervise their stockbrokers.
The law requires that a broker make suitable recommendations for clients. Suitability factors include the client’s age, risk tolerance, need to access capital and general health. In this case, Massachusetts says Dumochel ever even had the woman complete a suitability questionnaire. (Given her mental state, it is questionable if she could even do so.) Brokers should never recommend any investments for people who are clearly mentally incapacitated.
Luckily for the woman, an alert bank employee became suspicious and started the process that ultimately alerted authorities. Unfortunately, tens of thousands of elderly Americans are victimized each year by greedy stockbrokers, contractors, care givers and even relatives.
The fraud lawyers at Mahany & Ertl help victims of fraud get back their hard earned money. As baby boomers begin to reach age 65, the number of elder fraud and elder abuse cases will likely rise. If you are a family member were the victims of any type of financial fraud or investment scam, give us a call. Our asset recovery attorneys have helped people across the U.S. get back their money.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine. Services nationwide.