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CFO Jeff Atwater Announces Arrest of Senior Scammer for $2 Million Investment Fraud

5/16/2012

Contact: Alexis Lambert
(850) 413-2842
 
TALLAHASSEE—Florida Chief Financial Officer Jeff Atwater announced today the arrest of former insurance agent Neal Seth Smalbach, 49, of Palm Harbor, for grand theft in misrepresenting details of financial products to multiple senior clients who allegedly suffered losses of more than $2 million in unsuitable financial investments. 

“Florida’s seniors have worked hard for many years to earn their money and prepare for retirement,” CFO Atwater said. “Criminals who choose to prey on the elderly for their own financial gain will be caught and they will be brought to justice.”

An investigation by the Department of Financial Services Division of Insurance Fraud revealed that Smalbach allegedly misrepresented the factual details of investment products to multiple senior citizens for personal gain. As a result of Smalbach’s misrepresentations, an estimated $4.6 million was invested by seniors in products that were unsuitable for them.

The Division of Agent and Agency Services also conducted an investigation of Smalbach and alleged that he falsified two applications for insurance to an insurer. On March 22, 2012, the division entered into a settlement with Smalbach providing for the surrender of his licenses with the same force and effect as a revocation and his permanent ban from the insurance industry.

Smalbach was booked into Pinellas County Jail and is awaiting bond.  If convicted, he faces up to 54 years in prison.  The Office of Statewide Prosecution will prosecute the charges against Smalbach.

CFO Atwater encourages seniors to visit the On Guard for Seniors website, www.MyFloridaCFO.com/OnGuard, for tips and resources designed to help seniors navigate through challenging financial decisions and avoid financial scams. For additional information, visit www.MyFloridaCFO.com or call the department’s Consumer Helpline at 1-877-MY-FL-CFO (1-877-693-5236). 

Anyone with information about these or any other incidents of suspected insurance fraud is asked to call 1-800-378-0445. Citizens who provide tips can remain anonymous. The Department of Financial Services to date has awarded almost $275,000 to more than 40 citizens as part of its Anti-Fraud Reward Program.  The program rewards individuals up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.
Chief Financial Officer Jeff Atwater, a statewide elected official, oversees the Department of Financial Services.  CFO Atwater’s priorities include fighting financial fraud, abuse and waste in government, reducing government spending and regulatory burdens that chase away businesses, and providing transparency and accountability in spending.