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CFO Jeff Atwater and Attorney General Pam Bondi Announce Conviction of Senior Scammer for $2 Million Investment Fraud

4/10/2013

Contact: Anna Alexopoulos 
(850) 413-2842
 
TALLAHASSEE—Florida Chief Financial Officer Jeff Atwater and Attorney General Pam Bondi announced today the conviction of former insurance agent Neal Seth Smalbach, 50, of Palm Harbor, for grand theft in misrepresenting details of financial products to more than 30 senior clients who suffered losses of more than $2 million in unsuitable financial investments.
 
“This is a great victory in the fight to protect seniors from financial crimes,” said CFO Atwater. “I applaud the fraud investigators, prosecutors, and all those involved in bringing this criminal to justice. This case sends a clear message that if you prey on seniors or anyone who is vulnerable in Florida, you will be put behind bars.”
 
“We put this criminal behind bars by working together, and we were able to obtain restitution for consumers who were affected by these shady deals,” stated Attorney General Pam Bondi. “Smalbach profited from knowingly misguiding elderly investors into making risky investments they did not qualify for, and these dishonest business practices will not be tolerated.”
 
An investigation by the Department of Financial Services’ Division of Insurance Fraud revealed that Smalbach misrepresented 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 and found that Smalbach falsified two applications for insurance. As a result, Smalbach agreed to surrender his insurance licenses, permanently banning him from the insurance industry.
 
The Attorney General Pam Bondi’s Office of Statewide Prosecution prosecuted the case on behalf of the senior victims. As a result, Smalbach was sentenced to seven years in prison followed by 10 years’ probation and was ordered to pay full restitution to the victims.
 
CFO Atwater encourages seniors to visit the On Guard for Seniors website, www.MyFloridaCFO.com/OnGuard, for great tips and resources designed to help seniors navigate through challenging financial decisions and avoid financial fraud. 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 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.