Camarillo insurance agent leaves trail of loss after thefts from annuity accounts
More than six years after a Camarillo insurance agent began raiding their investments and other assets, three victims who lost close to $1.8 million have no guarantee they will recover their money.
Insurance agent Steven Gordon was charged with stealing more than $1.1 million from a widowed mother of two from the Palm Springs area and about $660,000 from a divorced couple now living in Europe, according to a court document filed by Ventura County prosecutors.
The thefts came from annuity funds, life insurance policies, credit cards, checks and college funds, the criminal complaint against Gordon shows.
The three customers shared $185,343 that the state seized from Gordon’s resources to partially compensate them, but he died by his own hand late last year before full restitution could be ordered. It appears unlikely they would get the rest even if the 68-year-old man had lived and finished his prison term based on his age, health and financial holdings. Nor does the state Department of Insurance have a fund set aside for victims of fraud by insurance agents to recoup their losses.
The state insurance department said theft is the most common crime committed by licensed insurance agents and firms, but rare.
"With more than 400,000 licensees of the department and the enormous number of insurance transactions that take place each day, it is a very small number," the agency said in a statement. "Our department investigates, statewide, dozens of such allegations each year and works with local law enforcement when they prove to be founded."
But they can be hidden for years, based on what happened in the Gordon case.
The state Department of Insurance only became aware of the suspected fraud in 2020 or possibly 2019 after receiving a complaint from EquiTrust Life Insurance Co., which held annuity accounts for the three victims. Gordon withdrew the funds from the annuities as early as 2016, the Ventura County District Attorney's Office said in its criminal complaint against Gordon.
Officials at the state insurance department said they launched the investigation five weeks after hearing of the suspected fraudulent activity from EquiTrust. They blamed Gordon's deceptions for the years-long period in which he committed the transgressions without their knowledge. He falsified many documents to customers, masking his crimes for several years and making it unlikely the insurer or the victims could have detected them, the state agency said.
That squares with the experience of Kellie Tyndall, who advocates for seniors subjected to financial scams in her position at the district attorney’s office. The perpetrators include bankers, family members and call centers across the world as well as a handful she has seen by insurance agents in the last five years, she said.
“A lot of these cases aren’t even reported because of the shame and guilt the victim has,” she said. “Probably one in 100 are reported.”
Access blocked
The state reported in 2021 that Gordon concealed his crimes by stealing the identities of his victims and changing the mailing addresses of the accounts to his home address.
Officials said he changed the email addresses associated with his victims’ accounts to an email address that he created, preventing them from receiving account statements showing evidence of the withdrawals he was making. Gordon would then mail the victims falsified account statements that omitted the withdrawals, officials said.
The state Department of Insurance shared the findings of its investigation with the DA's office, which charged Gordon with 21 felony counts of grand theft, forgery, unauthorized use of victims' identification and fraudulent use of credit cards. Gordon pleaded guilty to eight counts of grand theft and one for forgery in November, while the other 12 counts were dismissed in a plea agreement.
He also agreed to an eight-year prison term. Less than three hours before he was supposed to appear for sentencing on Dec. 28, he died by suicide, saying in a note that he was "too messed up" from a 2020 motorcycle accident to go to jail.
He had sustained a traumatic brain injury and some paralysis to his right side in the motorcycle accident, according to the Ventura County Medical Examiner's Office report on the suicide. He also wrote in what he called his "dying declaration" that he did not steal or take money.
Senior Deputy DA Howard Wise said the plea agreement reflected the amount of prison time he thought was just and that the deal did not lower the restitution.
The fraud prosecutor said he bases his recommendations on the amount that was taken, the likelihood of getting the money returned and how long it would take if the matter went to trial. In this matter, the victims were "very motivated" to get the $185,000, and wanted it to happen sooner rather than later, he said.
The DA's office and the state insurance department looked for other assets that could be used to pay restitution to the victims, but didn't find any, he said.
Lawsuits follow
Although the criminal case has ended, civil litigation over the losses is still in play. The couple who lost money, Stephanie Tortelli and Sebastien Tortelli, have filed two lawsuits.
They sued Gordon's estate, his widow and the John Hancock Life Insurance Co. to recover their losses from Gordon's $5 million life insurance policy. But perhaps the bigger legal question lies in their breach of contract and negligence lawsuit against EquiTrust. The suit alleges that the Iowa life insurance company facilitated Gordon's actions by failing to question the annuity withdrawals and prevent the fraudulent activity.
The company declined to answer questions on why the losses were not caught earlier and whether it had changed policies as a result.
EquiTrust has denied liability for the Tortelli losses, citing an Iowa law that requires knowledge of unlawful activity.
Chief Legal Officer Paul Miller said the company does not comment on pending litigation, declining comment on specific questions. He said the company is confident in its legal position in the matter and that protections for policy holders are of utmost importance.
The Tortellis invested all their retirement money with EquiTrust, starting with $600,000 in 2012 when they were living in California, Stephanie Tortelli said. It was after the couple moved to Europe in 2016 that large chunks of money were withdrawn about every month and sometimes every week, she said in an email.
Gordon sent the couple fake financial statements while EquiTrust failed to communicate with them by either phone or mail, she said. Nor did the company question the suspect withdrawals, Stephanie Tortelli said.
She said all their accounts totaling about $1 million were emptied. The couple was married at the time of the thefts but is now divorced.
"I'm broke since I lost everything in the whole process," she said.
Officials in the state insurance department said they continuously advocate for improvements in the law to protect the public, but have not adopted any new policies tied directly to Gordon’s thefts because he violated existing laws.
Stefan Sacks, the Los Angeles attorney who represented Gordon, declined comment.
The state revoked the insurance licenses of both Steven and his wife Amy Gordon in 2021 after notifying them of accusations related to unauthorized withdrawals from annuity contracts held by the victims and a fourth person. The Gordons ultimately decided not to contest the charges, according to a state document.
Amy Gordon was not charged with any crimes by the DA's Office.
Randy Vickrey, the former police officer who investigated the claims against Gordon for the state Department of Insurance, said thefts may not be discovered unless a complaint is filed. He advises the public to never trust their insurance agents 100%, and said customers should communicate directly with their insurance companies to ensure their money is safe.
"If your agent is corrupt, you are susceptible," he said.
If you're feeling despondent, the 988 Suicide and Crisis Lifeline, for both English and Spanish speakers, can be reached by calling 988 and can be found on the web at https://988lifeline.org.
Kathleen Wilson covers crime, courts and local government for the Ventura County Star. Reach her at kathleen.wilson@vcstar.com or 805-437-0271.
This article originally appeared on Ventura County Star: Annuities theft by Camarillo agent leaves victims with losses
