Farmer, 94, Sues Cetera for Ignoring Alleged $640,000 Annuity Theft
A 94-year-old retired farmer has sued Cetera Financial Services and First National Bank in Sioux Falls (S.D.) for breach of fiduciary duty and negligence for allegedly allowing his son-in-law to forge his signature on account opening documents and on more than $639,000 of variable annuity withdrawal and surrender requests.
Harold Wittrock alleges that the $654,000 Jackson National Life annuity he bought through an insurance agent unaffiliated with Cetera and its predecessor firm Primevest Financial in November 2007 had $5,000 left in it as of this March, following 43 withdrawals over seven-and-a-half years by Roger Kappel, his son-in-law.
Jackson National issued alerts to a bank employee who was also registered with Cetera about the excess withdrawals, but no one from the bank or broker-dealer ever contacted Wittrock for verification, the lawsuit alleges.
Kappel allegedly forged Wittrock’s name on a Cetera new-account form in 2009 and on a change-of-address form that allowed him to receive statements. When Wittrock asked about the annuity, Kappel gave him doctored statements, according to the suit that was filed Thursday in U.S. District Court for the Southern Division of the District of South Dakota.
Cetera’s new account application restricting disputes to arbitration was opened with a forged signature and filled out by a bank employee registered with the broker-dealer, the lawsuit says.
Kappel, who the lawsuit says is being investigated by the FBI, could not be reached for comment.
Michael Schaffer, Wittrock’s lawyer, declined to comment other than to note that the complaint does not allege elder abuse and was appropriately filed in court. Schaffer in 1993 filed a fraud and misrepresentation suit on behalf of relatives against Edward D. Jones over an oil-and-gas income limited partnership that resulted in a punitive damage award of $750,000. His father lost $25,000 on the investment.
Adam Cox, chief wealth management officer of First National Bank in Sioux Falls, declined to comment on the lawsuit, which Schaffer said had likely not been served on the bank as of Friday morning.
First National has already reimbursed Wittrock $310,000, but the lawsuit alleges that the annuity today would have been valued at more than $800,000 if there had been no withdrawals.
Wittrock himself made only two withdrawals from the annuity totaling $10,000, according to the lawsuit.
A person answering the phone of LeAnn Rummel, president of Cetera’s St. Cloud, Minnesota-based “Financial Institutions” unit, referred calls to spokespeople at the California-based parent company. They did not respond to requests for comment.