Florida Annuity News

Botetourt Woman Pleads Guilty To Mail Fraud And Money Laundering

United States Attorney John L. Brownlee announced today that Monica Yates, age 40, of Daleville, Virginia, pleaded guilty to one count each of mail fraud and money laundering in United States District Court in Roanoke. The plea was entered before Judge Samuel G. Wilson pursuant to a plea agreement.

According to evidence presented by Assistant United States Attorney C. Patrick Hogeboom, III, Yates worked for CUNA Mutual Life Insurance Company from November 16, 2001 through May 19, 2006. Yates was responsible for providing insurance, securities and financial services to credit union members, and established business relationships with many of her clients. Beginning in May 2006, Yates became an employee of Merrill Lynch, Pierce, Fenner & Smith, Inc. She was terminated when her scheme was uncovered.

Yates promised investors safe and secure investments with high rates of return. However, Yates used funds from new investors to pay profit payments to older investors. Yates convinced her victims to terminate their long term CUNA financial products. The termination of these funds required a substantial early cancellation penalty, but Yates did not advise the victims of this penalty and concealed it from the victims.

Yates would prepare forms entitled “Service Form for Variable Annuity,” in order to terminate the victims variable annuities. Once the forms were complete, Yates sent them to the CUNA office in Waverly, Iowa by fax or mail. Once the funds from the terminated accounts were received, Yates would deposit them in her own personal accounts at Bank of America. Yates would also prepare a false account statement that showed that the victim’s funds were being invested and earning monthly interest.

The Ponzi scheme impacted 18 CUNA customers and four Merrill Lynch customers. The actual loss to the victims was approximately $1,300,000.

Yates is scheduled to be sentenced June 18, 2007.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, the Botetourt County Sheriff’s Office and the Botetourt County Commonwealth’s Attorney’s Office. Assistant United States Attorney C. Patrick Hogeboom, III, prosecuted the case.

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	Did You Know?
	Employee Retirement Income Security Act (ERISA) The federal law that establishes the basic requirements for employee benefit plans. The authority for administering and enforcing ERISA is divided among three federal agencies: The Internal Revenue Service (IRS), the Department of Labor (DOL), and the Pension Benefit Guaranty Corporation (PBGC).