California Agent Sentenced In Theft From Trust Account

U.S. Attorney's Office

Northern District of California

FOR IMMEDIATE RELEASE

Wednesday, September 20, 2017

Santa Clara Luxury Insurance Broker Sentenced To Five Years In Prison For Theft From Widow's Insurance Policy

Defendant stole nearly $1.5 million from widow's insurance policy

SAN JOSE - Gary Thornhill was sentenced today to serve 60 months in prison for wire fraud and mail fraud in connection with a scheme to steal more than a million dollars from a client's trust account, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Lucy M. Koh, U.S. District Court Judge, after Thornhill pleaded guilty to the crimes on June 7, 2017.

Thornhill, 65, of Santa Clara, admitted he used his position in a boutique insurance brokerage to withdraw funds from a widow's client trust account. As part of his plea, Thornhill admitted he is a licensed insurance broker who owned and operated a boutique insurance brokerage in Santa Clara. In 1998, he sold an insurance policy to a married couple and, after the husband passed away in 2005, the widow became the sole insured of the plan. In or about February 2008, Thornhill became the trustee of the entity that was the legal owner of the policy. Thornhill acknowledged that he owed a fiduciary duty to the widow both as his client and as the trustee for the entity that managed the insurance policy. Thornhill admitted that instead of acting in his client's best interest, he transmitted written requests for funds to be drawn against the cash value of the widow's insurance policy-he did so without the widow's prior knowledge, consent, or authorization. Specifically, Thornhill admitted he faxed a request for disbursement from the existing cash value of the policy in the net amount of $800,000. After receiving the check in the mail, Thornhill deposited it into a bank account of which he was the only authorized signatory. Thornhill admitted he transferred all of the funds into a personal bank account and spent all of the funds he had obtained from the policy on personal expenses that were unrelated to his client. He then doctored the account statements before they were given to the client, in order to conceal his scheme.

As a result of his scheme, Thornhill obtained nearly $1.5 million in unauthorized funds from his client's policy that he used for his own personal benefit and purposes. Thornhill pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. S. 1343, and one count of mail fraud, in violation of 18 U.S.C. S. 1341.

During today's sentencing, Judge Koh remarked that the defendant "really took advantage of this family," and decided to steal from them despite, "a long-standing financial relationship with this family" that stretched back almost twenty years.

In addition to the prison term, Judge Koh sentenced Thornhill to three years of supervised release and ordered him to pay $1,409,843.90 in restitution. Judge Koh ordered the defendant to self-surrender and begin serving his sentence no later than November 15, 2017.

Assistant United States Attorney Timothy J. Lucey is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation the by the Federal Bureau of Investigation.

Component(s):

DOJ - USAO

Updated September 20, 2017

The post California Agent Sentenced In Theft From Trust Account appeared first on InsuranceNewsNet.

Posted by Unknown

Tweet