The attorney general this week announced a lawsuit against a Norwell mortgage broker, a loan originator and an outside insurance agent the AG’s office accused of defrauding elderly homeowners.
Attorney General Maura Healey’s office said that Direct Finance Corp., its employee Daniel Matthews and insurance agent James Moniz, convinced elderly homeowners to apply for reverse mortgages and invest in risky financial products, including variable annuities.
According to a complaint filed Tuesday in Suffolk Superior Court, the defendants worked together to convince seniors to apply for reverse mortgage loans, which freed up money to invest in risky annuities and other financial products. In one case, Healey’s office said, Moniz and Matthews convinced a widow unfamiliar with financial products to invest her reverse mortgage proceeds in an annuity that tied up her money for several years. Moniz convinced the widow to sign blank forms in order to place her money into an annuity without her knowledge, the AG said.
Healey said the defendants failed to disclose material information about those financial products and misrepresented their terms, and furthermore, they misrepresented information to insurance and financial companies to ensure they would issue the products to their clients. Matthews earned commissions for each reverse mortgage he originated, and Moniz earned a commission each time he sold deferred variable annuities, Healey said.
Last fall, the AG’s office settled allegations with Moniz’s former employer, John Hancock Life Insurance Co. (U.S.A.) that it unfairly failed to effectively supervise Moniz, permitting him to sell unsuitable variable life insurance policies, variable annuities, and other insurance and financial products. The settlement also alleged that Moniz developed an association with Matthews to induce senior clients to apply for reverse mortgages and invest the proceeds in unsuitable variable annuities. John Hancock paid more than $550,000 to seniors in Massachusetts to resolve those allegations.
This week’s complaint seeks injunctive relief, restitution for consumers, civil penalties, attorneys’ fees and repayment of commissions.
