| Copyright: | (c) 2010 A.M. Best Company, Inc. |
| Source: | A.M. Best Company, Inc. |
| Wordcount: | 447 |
The Denver district attorney charged a former insurance salesman, fired after allegedly admitting to a CNO Financial Group Inc. investigator that he obtained personal loans from 25 elderly clients, with three felony theft counts. More charges are likely, according to a spokeswoman for the D.A.
Michael Mendenhall, 47, a former agent with Bankers Life Insurance Co., is accused of stealing more than $1 million from victims over seven years.
Mendenhall was terminated following an interview last month with Rick Riser, director of investigations at CNO Financial Group, in which he admitted he had borrowed more than $800,000 in cash from clients of Conseco and Bankers Life, convincing them to cash in annuities for a real-estate development Mendenhall was allegedly involved in, according to an affidavit.
At least one person told authorities that Mendenhall told her she could make a higher return with him than what she was receiving on her annuity purchased from Bankers Life, according to the affidavit.
In an ironic twist, the affidavit said the meeting between Riser and Mendenhall was a result of a phone call Mendenhall made to the company's hotline, saying he had believed Conseco managers were engaged in "unethical practices."
Riser provided the Colorado Department of Insurance with a list of 25 clients who had given more than $1 million to Mendenhall since January 2003, according to the affidavit.
"There is still very much work going on," said Lynn Kimbrough, a spokesman for the district attorney. Since Mendenhall's arrest, more individuals have contacted authorities, and additional charges are expected, she said.
To date, Mendenhall is charged with three counts of theft of an at-risk adult. Under Colorado law, an at-risk adult is defined as anyone 60 or older or a person who has a disability. The law provides special protection for these individuals and makes the count a more serious crime. Kimbrough said.
One purported victim, a farmer in Brush, Colo., told authorities he invested $70,000 with Mendenhall, who promised the farmer a 9% rate of return. When the farmer called Mendenhall, asking for help because his wife required 24-hour care, Mendenhall sent a check for $1,000 that bounced, according to the affidavit.
The affidavit lists some 22 promissory notes, ranging from $15,000 to more than $130,000, signed by Mendenhall, to 19 individuals.
Mendenhall paid monthly mortgage payments of about $10,000 from funds he received from investors, as well as a health-club membership and car payments totaling more than $12,000, according to the affidavit.
Conseco Life Insurance Co. currently has a Best's Financial Strength Rating of B- (Fair). Most rated members of CNO Financial Group have a Best's Financial Strength Rating of B (Fair).
(By Diana Rosenberg, senior associate editor, BestWeek)
