More than six years after a Camarillo insurance agent began looting their investments and other assets, three victims who lost nearly $1.8 million have no guarantee they will get their money back.
Insurance agent Steven Gordon was charged with stealing more than $1.1 million from a Palm Springs widow and mother of two and about $660,000 from a divorced couple now living in Europe, according to a court document filed by the Ventura County prosecutors.
The thefts came from annuity funds, life insurance policies, credit cards, checks and college funds, according to the indictment against Gordon.
The three clients shared $185,343 that the state seized from Gordon’s resources to partially compensate them, but he died singlehandedly late last year before full restitution could be ordered. It seems unlikely that they would get the rest, even if the 68-year-old man had lived and served his prison sentence based on his age, health and financial assets. The State Ministry of Insurance has also not set aside a fund 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 companies, but is rare.
“With over 400,000 department licensees and the sheer volume of insurance transactions taking place each day, it’s a very small number,” the agency said in a statement. “Our department investigates dozens of such allegations statewide each year and cooperates with local law enforcement when they are found to be founded.”
But they could be hidden for years, based on what happened in the Gordon case.
The 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 took the money out of the annuities way back in 2016, the Ventura County district attorney said in his indictment against Gordon.
State Insurance Department officials said they began the investigation five weeks after learning of EquiTrust’s suspected fraudulent activities. They blamed Gordon’s deception for the years of his committing the transgressions without their knowledge. He forged many documents to clients, masking his crimes for years and making it unlikely that the insurer or victims could have discovered them, the government agency said.
That echoes the experience of Kellie Tyndall, who advocates for seniors who are victims of financial scams in her position with the District Attorney’s Office. The perpetrators include bankers, relatives and call centers around the world, as well as a handful she’s seen through insurance agents over the past five years, she said.
“Many of these cases go unreported because of the victim’s shame and guilt,” she said. “Probably one in 100 will be reported.”
The state reported in 2021 that Gordon hid his crimes by stealing his victims’ identities and changing the accounts’ mailing addresses to his home address.
Officials said he changed the email addresses associated with his victims’ accounts to one he created, preventing them from receiving account statements with evidence of the withdrawals he made. Gordon would then email the victims forged account statements that omitted the withdrawals, officials said.
The State Department of Insurance shared the findings of its investigation with the district attorney’s office, which charged Gordon with 21 counts of grand larceny, forgery, unauthorized use of victim identification and fraudulent use of credit cards. Gordon pleaded guilty to eight counts of grand larceny and one count of forgery in November, while the other 12 counts were dismissed in a plea deal.
He also agreed to an eight-year prison sentence. Less than three hours before he was due to appear for sentencing on Dec. 28, he committed suicide, saying in a note that he was “too confused” from a 2020 motorcycle accident to go to jail.
According to the Ventura County Medical Examiner’s Office report on the suicide, he suffered a traumatic brain injury and some paralysis on his right side in the motorcycle accident. He also wrote in what he called his “dying statement” that he had not stolen or taken money.
Senior Deputy DA Howard Wise said the plea deal reflected the amount of jail time he felt was just and that the deal did not reduce restitution.
The fraud prosecutor said he bases his recommendations on the amount taken, the likelihood of the money being refunded and how long it would take if the case went to trial. In this case, the victims were “highly motivated” to get the $185,000, and wanted it to happen sooner rather than later, he said.
The prosecution and state insurance department looked for other assets that could be used to compensate the victims, but found none, he said.
Although the criminal case has ended, civil proceedings over the losses are still ongoing. The couple that lost money, Stephanie Tortelli and Sebastien Tortelli, 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 lawsuit alleges that the Iowa life insurance company facilitated Gordon’s actions by not questioning the annuity withdrawals and failing to prevent the fraudulent activity.
The company declined to answer questions about why the losses were not absorbed sooner and whether it had changed its policy as a result.
EquiTrust has denied liability for the Tortelli losses, citing an Iowa law that requires knowledge of illegal activity.
Chief Legal Officer Paul Miller said the company does not comment on pending litigation and declines to comment on specific questions. He said the company is confident in its legal position in this matter and that policyholder protection is of paramount importance.
The Tortellis invested all of their retirement money with EquiTrust, starting with $600,000 in 2012 when they lived in California, Stephanie Tortelli said. After the couple moved to Europe in 2016, large amounts of money were being withdrawn roughly every month and sometimes every week, she said in an email.
Gordon sent the couple false financial statements, while EquiTrust did not communicate with them by phone or email, she said. Nor did the company question the suspicious recordings, Stephanie Tortelli said.
She said all of their accounts totaling about $1 million had been emptied. The couple was married at the time of the thefts, but are now divorced.
“I’m broke since I lost everything in the whole process,” she said.
State insurance department officials said they are continually calling for improvements in the law to protect the public, but have not adopted any new policies directly related to Gordon’s thefts because he violated existing laws.
Stefan Sacks, the Los Angeles attorney representing Gordon, declined to comment.
The state revoked the insurance licenses of both Steven and his wife Amy Gordon in 2021 after notifying them of allegations related to unauthorized withdrawals of the victims’ and a fourth person’s annuity contracts. In the end, according to a state document, the Gordons decided not to contest the allegations.
Amy Gordon was not charged with crimes by the prosecution.
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 never to 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’re 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 [email protected] or 805-437-0271.
This article originally appeared on Ventura County Star: Annuity theft by Camarillo cop leaves victims with losses