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Two financial professionals charged with multiple felonies for stealing over $490,000 in separate fraud schemes against senior clients

3/17/2016 10:11:16 AM

Commerce Department proposes new law to help spot and stop senior financial fraud 

SAINT PAUL – Minnesota Commerce Commissioner Mike Rothman announced today that a former insurance agent from Minnetrista and a former financial adviser from Edina are facing multiple felony charges in separate cases where they exploited senior clients.

Paul M. Bardine, 54, of Minnetrista, is charged with three counts of insurance fraud and three counts of theft by swindle. He is accused of stealing more than $270,000 from several clients, including a 79-year-old woman and a couple in their late 70s.

John V. Heath, 45, of Edina, is charged with one count of theft by swindle and one count of identity theft. He is accused of stealing more than $220,000 from an 88-year-old client with Alzheimer’s disease.

The two criminal investigations were conducted by the Minnesota Commerce Fraud Bureau and charges were filed by the Hennepin County Attorney’s Office. The Commerce Department’s Securities Section also conducted regulatory investigations of the two men.

“These two financial professionals exploited their positions of trust to lie, cheat and steal from their clients,” said Rothman. “These cases are a distressing reminder that seniors are often targeted for financial exploitation, and this threat is expected to grow as the senior population itself grows. I encourage Minnesota seniors to closely monitor their finances, talk with family members and contact the Commerce Department if anything seems suspicious.”

Rothman pointed out that Heath’s crime was reported to authorities when the victim’s financial institution noticed unusual transactions on his account. In the current legislative session, the Commerce Department has proposed the Safe Seniors Financial Protection Act to provide new tools to financial institutions to intervene when they suspect a senior or vulnerable adult is a victim of financial fraud.

“I am appalled when I see these crimes against our senior citizens, who have worked hard all of their lives to build up a nest egg so they can live independently,” said Hennepin County Attorney Mike Freeman said. “We will prosecute Mr. Bardine and Mr. Heath vigorously, and if we are successful, try to get them prison time.”

According to the criminal complaints:

Bardine was an insurance agent in Minnesota whose license became inactive in August 2012. Beginning in the summer of 2013, he persuaded several of his clients to cash out annuities he had previously sold them. He encouraged them to invest their money with one of his companies, O.B. Investment, offering an annual rate of return ranging from six to 13 percent.

The victims gave personal checks to Bardine with the understanding he would invest their money as promised. Instead, he used their funds for personal expenses and exhausted the money that the victims had entrusted to him.  

Heath, who worked as a financial adviser, held an insurance agent license and was registered as an investment adviser representative and broker-dealer agent. Over the course of two months during the fall of 2015, he cashed out an annuity owned by his 88-year old client by submitting written requests in which he posed as the victim.

Heath funneled the annuity funds to a checking account he had opened in the victim’s name without his knowledge. Heath also created a fraudulent power of attorney document in order to access funds from the victim’s account. Heath made numerous ATM cash withdrawals and payments for his own credit card bills, as well as other withdrawals to pay for personal expenses. 

The victim’s financial institution became concerned about the transactions on the account and made a report of suspected financial exploitation to law enforcement and adult protection authorities.

Rothman said that anyone who believes they may be a victim of either Bardine or Heath should contact the Minnesota Commerce Fraud Bureau at 651-539-1617.

Commerce is here to help

If you have a question or concern about a possible fraud or scam, contact the Department of Commerce Consumer Services Center by email at consumer.protection@state.mn.us or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).

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