Insurance advisor cheats seniors out of millions

Advisors can only shake their heads in disbelief, with one of their own allegedly diverting millions of dollars from vulnerable seniors into mortgage and car payments

Texas insurance agent Bobby Collins has recently been charged by the Securities and Exchange Commission with operating a multi-year fraud out of his insurance and retirement planning business.
“Collins orchestrated a scheme targeting elderly investors through his unincorporated retirement planning business, Collins Insurance Companies a/k/a BMC Retirement Planning dating back to at least 2010,” alleges the SEC in a press release. “Collins lured at least 36 investors, most of whom are older than 65 years of age, to invest more than $4.6 million by offering high-yield, unsecured notes.”
Collins allegedly assured unsuspecting investors that the funds raised would be used to grow his retirement planning business with significant returns being generated as a result of the increased revenue from new clients.
Unfortunately, alleges the SEC, less than 2% of the funds went towards business purposes. The rest was spent on mortgage payments, car payments, other personal expenditures as well as payments to earlier investors – hence the Ponzi scheme reference.
The agent was purportedly selling various retirement planning products through his insurance business, including fixed index annuities and Medicare supplements. However, the SEC complaint suggests that Collins’ only source of revenue over the last five years was the sale of these unsecured high-yield notes, none of which was registered with the commission.
Violating several sections of the Securities Act, Collins has agreed to pay disgorgement and prejudgement interest of $573,234 as well as a $160,000 civil penalty. The settlement is subject to court approval by the United States District Court for the Northern District of Texas.
What prompted the investors to bite on the notes?
“Defendant represented to these investors that he would use their funds to grow his business, such as purchasing advertising and client lead sheets,” said the SEC complaint. “In exchange, he promised investors outsized returns, typically 25% over a 12, 18, or 24-month term.”