Amarillo woman's conviction overturned in annuities scam
April 16, 2013 by Jim McBride
Posted: April 15, 2013 – 11:31am
By Jim McBride
jim.mcbride@amarillo.com
Amarillo woman’s conviction overturned in annuities scam
Amarillo Globe-News
An Amarillo woman will be resentenced later this month after a federal appeals court overturned her money laundering conviction in a two-year, mother-and-son scam that drained more than $700,000 from elderly client’s annuities.
In 2011, an Amarillo federal jury convicted Janice Edwina Demmitt, then 60, of wire fraud, conspiracy and money-laundering related counts, and she was sentenced to serve more than 5 years in federal prison.
She also was ordered to pay $582,784 in restitution and serve five years of supervised release.
Demmitt’s son, Timothy Fry, 33, pleaded guilty to one count of money laundering and was sentenced to 87 months in federal prison. Fry stole more than $700,000 from clients, court records show.
One of the indictments alleged Demmitt committed money laundering by wire transferring $3,000 to her son’s account, but the U.S. 5th Circuit Court of Appeals ruled last month that the transfer did not meet the legal standard for a money laundering conviction.
Demmitt is expected to be resentenced later this month.
Demmitt and Fry sold annuities from 2007 to 2009 as registered agents of Allianz Life Insurance Company of North America, based in Minneapolis, according to court records.
Federal prosecutors said Fry and Demmitt told investors to cash in or borrow against their accounts with Allianz, and that they would reinvest those funds and match the investment up to $100,000, according to the indictment.
On behalf of the investors, Fry and Demmitt sent requests to Allianz to liquidate their clients’ investment annuities, which Fry and Demmitt deposited in their personal accounts, the indictment said.
Demmitt and her son both used clients’ money to buy new vehicles, and Demmit used clients’ money to cover business and personal expenses, including frequent purchases from QVC and payments to an interior decorator. Two clients filed a complaint against the pair with Amarillo police in 2008, alleging that Fry had stolen $450,000 from them.
Allianz later terminated Fry’s contract to sell its product in 2008 and Demmit’s contract was severed in January 2009.
Allianz Life also fully reimbursed the investors victimized by the scam, an Allianz spokesman said.
Jim McBride can be reached at 806-345-3354 or jim.mcbride@amarillo.com.
Follow Jim on Twitter @https://twitter.com/#!/jimi52
