On Jul. 18, CAL INS charged financial advisor money laundering.
- Long Beach financial advisor Tom Fallon sentenced to over 10 years in state prison, must pay nearly $1mn on 25 criminal counts of money laundering and grand theft.
Bases for Conviction
- Found Fallon convinced victims to deposit workers’ compensation settlement checks in workers’ compensation Medicare set aside accounts (WCMSA), as required by law.
- WCMSAs allocate a portion of workers’ compensation settlements to pay for the future medical services that are related to the worker’s compensation injury, illness, disease.
- Must deplete WCMSAs before Medicare will pay for treatment related to workers’ comp.
- Victims convinced to deposit their settlement funds with Fallon-owned companies so he could embezzle $995,118 for his personal gain and to fund various other businesses.
- Fallon shared office with victims’ attorney, got funds deposited with Fortis Financial Insurance Services, and Legacy Group Financial, WCMSA accounts not established.
- Many of the victims stated lost their homes, way of life, and their retirement savings.