By Darla Mercado
September 4, 2009
A South Shore, Ky.-based insurance agent this week was sentenced to five years in prison and ordered to pay almost $400,000 in fines for swindling clients in a Ponzi scheme that involved annuities.
Between August 2003 and June 2008, Robert W. Rister, an independent insurance agent at Rister Insurance and Financial Services, stole $550,300 by convincing some of his annuity and insurance clients to sell their holdings and reinvest in different funds with him, according to the complaint filed by James A. Zerhusen, a U.S. attorney.
The case was filed in the U.S. District Court for the Eastern District of Kentucky, Northern Division, with Benjamin G. Dusing, assistant U.S. attorney.
According to the complaint, Mr. Rister used the cash from the liquidated funds for his own purposes. In some cases, he would either place the money into his business bank account to cover personal expenses or use it to pay off other clients to cover up the fraud.
In order to keep clients in the dark, Mr. Rister would create false documents to show the investors that their money had indeed been reinvested.
He pleaded guilty to the charges this May, admitting that between 2003 and 2008, he had misappropriated the clients' funds.
Though he had returned $150,546 of the stolen cash, Mr. Rister will still have to serve at least 85% of his five-year sentence, plus three years of probation following his release.
He will also have to pay $399,780 in restitution for mail fraud.