CAL INS Advisor $1mn Laundering

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.