Insurance Salesman Sentenced to 18 Years for Elder Financial Fraud
Zachary James Flaherty, 48, of Des Moines, was sentenced in June and also ordered to pay the victims $2.4 million in restitution for his deceptive acts, according to a press release from the Department of Justice.
Over the period of 17 years, from 2006 to 2023, Flaherty targeted over thirty victims, building trust and companionship, then took advantage of that trust by draining their retirement accounts under the guise of “investments.” He preyed on victims in multiple states, including Iowa, Kansas, Missouri, and Nebraska. He almost exclusively targeted the elderly, with one of his oldest victims being 93 years old.
“This case was just one example of many of our efforts to protect citizens of Iowa against fraud,” Matt Mortvedt, Iowa Insurance Division Fraud Bureau Chief, said in a press release. “The Special Investigators exhibited outstanding dedication during this investigation in their unwavering commitment to protect Iowans.”
The charges were brought against Flaherty after a joint investigation by the Iowa Insurance Division Fraud Bureau and the Federal Bureau of Investigation (FBI), according to a press release. Denise Rudolph and Chris Scanlon, Iowa Insurance Division Fraud Bureau special investigators, and FBI Special Agent Kevin Kohler were recognized with the Law Enforcement Victim Service Award in April 2024 due to their investigation into Flaherty.
Many of Flaherty’s victims had a very limited knowledge of finance or investing, and he seemed to prey on that weakness. He would gain their confidence by developing close relationships with them, taking them out to restaurants, buying them gifts, and even assisting them around the house. Six of his victims were recently widowed when he befriended them, and Flaherty even went as far as assisting with funeral arrangements for their deceased spouses, according to prosecutors.
After gaining their trust, Flaherty would convince them to invest their savings with him, enticing them with inflated returns and non-existent bonuses. Afterward, he would misrepresent and conceal key pieces of information regarding their investments, as well as any costs or penalties tied to those investments. Flaherty was also accused of taking checks written to him for investment purposes and spending the money on himself, his businesses, and even his family instead of the investments he promised.
Unfortunately, cases like this are all too common in the U.S. and around the world. The best way to safeguard your elderly friends and family from being taken advantage of financially is through vigilance. Here are some warning signs to look out for, courtesy of the U.S. Department of Justice.
- Changes in normal banking behavior or newly opened bank accounts, including large cash withdrawals
- Additional names on accounts or bank cards
- Large withdrawals from accounts out of normal spending habits using ATM cards
- Changes in legal documents, like a will or other financial documents
- Loss of funds or valuable possessions without consent
- Forgery on documents used for banking, investments, or property/vehicle titles
- Previously distant family reappearing and taking an interest in finances
- Movement of assets to someone outside of the family or sudden transfers within the family
- Payment for services that seem out of place or unnecessary
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