Financial Advisor Accused Of Defrauding Clients

Posted at 11:01 PM, May 02, 2016
and last updated 2016-05-03 11:59:59-04

At least a half dozen senior citizens here in Tennessee say they lost their life savings.

And the man responsible, they say, was their financial advisor who promised to make their golden years even more golden.

Now they're angry, embarrassed and worried about their futures. They trusted this man and now he's accused of taking their money and spending it on himself.

When NewsChannel 5 Investigates first caught up with John Wilson, he wouldn't even admit who he was. It was outside the federal Courthouse in downtown Nashville as Wilson was heading inside.

We approached him and asked, "John Wilson?" He replied, "Who?" We said again, "John Wilson?" And, he responded, "No."

But Donna Siewert knows him all too well. 

"I trusted him, of course," she recalled.

Siewert said Wilson came to her, promising financial security and a tax free retirement.

But that's not the way it worked out.

"I've lost everything," she told NewsChannel 5 Investigates.

And she isn't the only one.

Susan Gilmore explained, "My mother was 85, had early dementia and she trusted him."

Gilmore and her sister, Amy Nix, say their mother Paula Gilmore also got taken by Wilson.

"This guy took everything she had -- her house, the life insurance," Susan Gilmore recounted.

In fact, the state of Tennessee recently suspended his insurance license after an investigation found Wilson -- who ran Preserve Financial Group in Brentwood -- used "a scheme to defraud his clients out of their retirement money," selling them "multiple insurance policies" "to obtain increased commissions."

In all, regulators say at least half a dozen of Wilson's clients lost hundreds of thousands of dollars.

Nearly all of them were senior citizens.

Donna Siewert is 77.

"You think he took advantage of that?" NewsChannel 5 Investigates asked her.

"Of course, he did!" Siewert exclaimed.

Siewert said that Wilson pressured her to sell the life insurance policies she and her husband already had plus real estate they owned to buy another insurance policy that state insurance investigators described as "extreme"and "extraordinarily" and "unsuitably expensive."

"So he had you buy insurance that you couldn't afford and you didn't need?" we asked.

"Yes, I really didn't," Siewert confirmed.

The premium on that policy was nearly $9,000 a month and Siewert said Wilson pushed her to get a reverse mortgage on her historic home and surrender a $20,000 annuity to make the payments.

"That was just a very bad idea," Siewert remarked. "Why do you think he suggested it then?" NewsChannel 5 Investigates wondered. "Cause it gave him cash in hand," she said.

Siewert said Wilson even offered to help pay the monthly premiums, but the checks bounced and ultimately the policy was canceled for non-payment.

Siewert now says she has no life insurance and her retirement savings are gone.

"It's an awful feeling when you find that you've just been used and abused and it was deliberate and it makes you angry," Siewert lamented.

When we found Wilson recently in front of the federal Courthouse, we asked him, "Your clients say you stole their money?"

"Absolutely not true," Wilson insisted.

"Their life savings?" we continued.

"That's not true," he replied.

And while Wilson denied any wrongdoing, he now faces federal fraud charges for swindling money from his clients and using it "for his own personal use."

Amy Nix and Susan Gilmore's mother, Paula, died earlier this year, just months after discovering she was suddenly in serious financial trouble.

"She couldn't understand why somebody would want to do that to her," Nix recalled.

"I think she was just convinced that he was going to double her money and make everything good," Gilmore added.

Instead, the sisters say Wilson had their mom buy expensive life insurance, which was then cashed out to buy more policies, creating more commissions for him.

And like other victims, Wilson convinced Paula Gilmore to take out a reverse mortgage.

"It was $70,000," Nix recalled.

"He took all of that money?" NewsChannel 5 Investigates asked.

"Took all of it," she answered.

Wilson told Gilmore he would invest the money in his own company's stock.

But federal prosecutors say in court documents "there was no such stock" and instead of investing the money, Wilson kept it for himself.

Additionally, the state found Wilson also gained access to Gilmore's bank account and three credit cards.

"And who used these credit cards?" we asked Amy Nix.

"He did!" she replied.

Records show Wilson racked up of tens of thousands of dollars in charges for things like a family vacation to Hilton Head, a private fishing charter, airline tickets, and concert and football tickets.

There was even an $1,100 charge to MTSU where Wilson's son was a student.

Gilmore's daughters say their mother lost nearly a quarter of a million dollars because of John Wilson.

"John Wilson got her for everything," Susan Gilmore stated tearfully.

He promised his clients financial security, but left them with nothing.

"I thought I was pretty careful. But, obviously, he's much better than I ever was," Donna Siewert added.

So how do you keep this from happening to you?

The Tennessee Department of Commerce & Insurance recommends that you say "no" to anyone who pushes you to make an immediate decision on an investment. And make sure the financial advisor and their firm is licensed before you sign anything.

As far as John Wilson, he now faces 40 years in prison and a half a million dollars in fines on those federal charges.  The state of Tennessee is also going after him. They're trying to revoke his license and ban him from selling insurance again. The state is also seeking $700,000 in fines.

Tips from the Tennessee Department of Commerce & Insurance's (TDCI) Securities Division to help older investors avoid financial exploitation:

1. Don't be a courtesy victim. Con artists will not hesitate to exploit your good manners. When a stranger asks for your money, you should proceed with the utmost caution. You are under absolutely no obligation to stay on the phone with a stranger or allow them in your home. Save your good manners for friends and family members, not strangers whose only real interest is to get his or her hands on your money.

2. Say "no" to investment professionals or con artists who press you to make an immediate decision. Before investing, check out the salesperson, firm and the investment opportunity itself. Extensive background information on investment salespeople and firms is available by contacting the Tennessee Securities Division.  Almost all investment opportunities must be registered for sale in the state in which you live. Your state securities agency can tell you if the investment opportunity is properly registered.  Before you part with your hard-earned savings, get written information about the investment opportunity, review it carefully, and make sure that you understand all the risks involved.

3. Always stay in charge of your money. Beware of anyone who suggests investing your money into something you don't understand or who urges that you leave everything in his or her hands. Take the time to educate yourself or involve a family member or a professional, such as your banker, before trusting a stranger who wants you to turn over your money and then sit back and wait for results.

4. Watch out for salespeople that prey on your fears.  Con artists know you worry about either outliving your savings or seeing all of your financial resources vanish overnight as the result of a catastrophic event, such as a costly hospitalization. Fear can cloud your good judgment. An investment that is right for you will make sense because you understand it and feel comfortable with the risk involved.

5. Don't let embarrassment or fear keep you from reporting investment fraud or abuse. Con artists know that you might hesitate to report that you have been victimized in financial schemes out of embarrassment or fear. Every day that you delay reporting fraud or abuse is one more day that the con artist is spending your money and finding new victims.

6. Beware of "reload" scams. Younger victims who are ripped off by swindlers have time to pick themselves up and restore some or all of their losses through new earnings. Older victims have a finite amount of money that is unlikely to be replenished in the event of fraud. The result is a panic that is well known to con artists who have developed schemes to take a "second bite" out of senior citizens who already have been victimized. Faced with a loss of funds, some senior citizens will go along with another scheme in which the con artists promise to make good on the original funds that were lost, and possibly even generate new returns beyond those originally promised.  When a significant loss occurs, call the Tennessee Securities Division to check out the person who invested your money before investing any more.