Kansas regulators have suspended the license of a Wichita insurance agent in a rare emergency order spurred by a federal investigation over alleged fraud linked to the trust of an elderly woman.
The action was taken against former State Farm insurance agent J. Matthew Pennington and comes as the FBI looks into his handling of the trust and estate of retired Wichita teacher Marlene Brown, who died last year at age 75. A search warrant shows the FBI searched Pennington’s Bel Aire home in June.
No criminal charges against Pennington have been filed in federal court in Kansas, although court records show the U.S. attorney’s office has begun forfeiture proceedings to seize his home and other property. A federal judge earlier this month found that probable cause existed that the proceeds were derived from wire fraud, mail fraud and bank fraud.
Pennington referred any comment to his attorney when contacted at his Bel Aire home, but hung up before saying who represented him.
The emergency order from the insurance commissioner alleges Pennington deposited the proceeds of a million-dollar life insurance from her trust into his own accounts. He also is accused of keeping for himself a baseball autographed by Babe Ruth valued at $100,000.
Pennington was an agent for various State Farm insurance companies for the past decade until the company severed the relationship last month, citing his false statements and creation of fraudulent documents, according to the emergency order from state Insurance Commissioner Sandy Praeger.
The order alleges Pennington was the trustee of the living trust established for his insurance client, a woman then in her 70s with no close living family members. He sold Brown a $1.3 million insurance policy, paid with a lump sum premium of more than $740,000 for which he was paid a commission of more than $52,100.
Within days after changing the mailing address on the insurance policy to his own home, he submitted a request for a partial withdrawal of $278,000 from the policy, which he claims Brown wanted him to have, the order said.
Pennington also sold the elderly woman a $100,000 deferred life annuity, which was cashed the following year and proceeds deposited into his own bank account, according to the insurance commissioner’s order.
The 75-year-old woman was found dead in her home in October 2009 by a neighbor who used a spare key to enter her home, according to the FBI affidavit in support of a search warrant. The neighbor reportedly told one of the trust’s beneficiaries he became concerned after Pennington had been unable to contact Brown since the previous day.
FBI agent Thomas Ensz said in affidavits filed in federal court to support of the seizures and search warrant that following Brown’s death Pennington opened up accounts with an altered version of the trust to conceal the interests of the beneficiaries so he could later fraudulently obtain money from the accounts without scrutiny.
His affidavit noted Pennington had previously attempted to defraud his clients regarding the purchase of a life insurance policy.
“Additionally, I know of no legitimate reason for Pennington to act as a trustee for the living trust or an executor of the last will and testament of any of his clients,” Ensz wrote.
Court documents also alleged that Pennington paid a notary public employed by his office $10,000 in exchange for her notarization of a personal property memoranda which bequeathed money and items to him and his relatives. The separate commissioner’s order further contends the employee acknowledged she notarized the documents without witnessing the signatures.
Was this article valuable?
Here are more articles you may enjoy.
AIG Sues Newly Launched Dellwood Insurance and Its Founders 
DeSantis Signs Bill Barring Local Worker Heat Protection Measures 
Florida Public Adjuster, Renter Charged With Filing Claim on Rental Home 
Soaring Insurance Costs Hit as US Buyers Finally Get a Break on Car Prices 
