Attorney David Neuman is Quoted Regarding Navy Veteran Scam
Attorney David Neuman Is Quoted in the St. Louis Post Dispatch Regarding an Investment Scam Client
Attorney David Neuman was quoted in the St. Louis Post Dispatch regarding a client of Israels & Neuman who was the victim of a fraudulent investment scam. The article was written by Robert Patrick, a reporter for the St. Louis Post Dispatch.
A link to the article can be found here: http://www.stltoday.com/business/local/navy-veteran-loses-after-broker-convinces-him-to-lend-life/article_5c0b8660-c19a-5ea8-829a-216421e6730f.html
Navy veteran, 76, loses $400,000 after broker convinces him to lend life savings to builder
- By Robert Patrick St. Louis Post-Dispatch
- Jul 12, 2017
The article states:
- LOUIS COUNTY • An infirm Navy veteran from St. Louis County has lost more than $400,000 after his longtime investment adviser persuaded him to lend his lifetime savings to a homebuilder now involved in a criminal investigation by federal authorities.
Frank B. Steinberger’s complaint to the Financial Industry Regulatory Authority, a nonprofit that regulates investment brokers and dealers, says William A. Glaser, of St. Albans, had Steinberger sell annuities he owned and incur $45,000 in surrender charges to invest in two promissory notes with Everett Builders LLC, a company run by Paul Everett Creager.
According to an online public filing published by the regulatory group, there is an “ongoing federal criminal investigation related to investments involving Paul Creager and his companies.”
FINRA’s Broker Check on Tuesday disclosed a June 9 complaint that matches the allegations in a copy of Steinberger’s complaint supplied by his lawyer. FINRA also says that Glaser has been “discharged” by National Planning Corp., and said that the firm “received an arbitration claim containing allegations that the representative solicited a private investment away from the firm. The representative admitted to personally making a similar private investment that was not previously disclosed to or approved by the firm.”
Glaser, who started with NPC in 2007, ended his employment there on July 5.
The Better Business Bureau of Eastern Missouri and Southern Illinois warned consumers about Creager and his companies in May, saying that he failed to perform work for which he’d been paid.
Creager denied any wrongdoing to the bureau.
Glaser did not return messages seeking comment. NPC and a lawyer for Creager declined to provide a comment in response to the complaint.
The U.S. attorney’s office and the FBI declined to confirm or deny the report.
Steinberger, 76, served for three years in the Navy and worked for McDonnell Douglas for 40 years helping make airplanes until his retirement around 2005, the complaint says.
Widowed in 2013 and currently afflicted with health problems including Alzheimer’s, Steinberger was not capable of making investment decisions, the complaint says. The investments with a St. Louis County builder were also not appropriate for him, it says.
Steinberger’s income came from Social Security, a pension and IRA income that was “just enough” to cover his expenses, including the cost of an assisted living facility.
David Neuman, one of the lawyers who is representing Steinberger, said in an interview that “a basic Google search” would have raised red flags about Creager.
Creager pleaded guilty to impersonating a police officer and retail theft, filed for bankruptcy twice and has been the subject of civil suits and a tax lien, court records and the complaint say.
Steinberger’s daughter, Amy Swaminathan, said she first noticed something was amiss when a check that her father normally receives didn’t arrive. She then learned of the promissory notes, she said.
Steinberger told the Post-Dispatch that the investment was made without his knowledge and consent.
Neuman said as investors age, they are typically steered into investments with less risk and more liquidity.
Glaser had been the financial adviser for Steinberger and his wife for nearly 30 years, the complaint says.
The complaint says Glaser had Steinberger liquidate two variable annuities in 2016, costing him nearly $19,000 in surrender charges, in order to invest in a $235,000 promissory note with Creager. Steinberger was supposed to reap $263,200 in February 2017, but did not, the complaint says.
Glaser had Steinberger sell another annuity and sent $126,000 to Creager on Nov. 23, 2016, costing Steinberger another $23,993 in surrender charges, the complaint says.
In all, Steinberger lost $361,000 in the questionable promissory notes and $45,632 in surrender charges and fees, the complaint says.
NPC and Glaser violated state law, FINRA regulations and the fiduciary duty they owed Steinberger, the complaint says.
In 2009, NPC was required to pay restitution of approximately $3.7 million to investors in Massachusetts to settle a complaint that the company failed to supervise a broker who sold risky promissory notes to the elderly.