Insurance Agent Who Preyed on the Elderly Could Go to Prison for Almost 100 Years
John F. Langford a 76 year old insurance agent from Amarillo, Texas could get nearly 100 years in prison for peddling fraudulent annuities to elderly investors, according to Investment News and other sources. According to Potter County officials, Mr. Langford pleaded guilty to fifteen (15) counts of securities fraud related to the sale of unregistered securities and fake investments resulting in losses of more than $5 million. His bond was set at $4 million and according to the article he continues to be held in the Potter County jail. Sentencing is scheduled for September 12, 2011 in Potter County.
Jimmy Don King, 65, Langford’s business partner, has turned himself in just last week to Potter County officials. He has been indicted on ten (10) counts, including selling unregistered securities, selling securities without a license to do so and being a dealer or agent without proper registration, among other things. In various television spots and radio commercials, King would shout their tagline, “At Langford & Associates, we don’t promise to make you rich, but we guarantee not to make you poor!”, as he was the face and voice of the firm in its commercials. His bail was set at $800,000 and he too remains in the Potter County jail, according to the article.
Apparently, the commercials worked because there were many who took them at their word and gave them their hard earned life savings to invest. The promises were huge, guaranteeing windfalls to the primarily elderly clientele over several years. The alleged investments that the two were peddling consisted of private annuities and promissory notes. The private annuities were supposed to pay out as much as 8% and the promissory notes were supposed to pay 9%, according to the court documents. Langford also confessed that he was paying Jimmy Don King 5% of any investments he generated through the firm.
The investigation revealed that the investor money taken in was used to make interest and principal payments to prior investors, like in any Ponzi scheme. The other money brought in was used to pay Langford’s business and personal expenses, including credit card bills and car payments. Last week the state security cops descended on Langford’s business located at 3117 S.W. 27th Avenue in Amarillo. They seized copies of income tax returns, investment records, ledgers and computer equipment, among other things. Analysis of the tax documents revealed that the insurance business operated at a negative cash flow and his property business never exceeded $10,000 in income in any of the years between 2005 and 2007. Investigators also found documentation that showed him owing investors more than $1 million.
The September sentencing comes after three years of investigating Langford and his business partner, Jimmy Don King by the Texas State Securities office and the Potter County District Attorney’s office. The pair became suspects after the guardian of an elderly, dementia stricken, Randall County woman filed suit against them, claiming that they had coerced the victim into turning over $941,756 to them for investments in nine (9) private annuities. The court later ruled that the elderly victim, more than 80 years old, was incompetent to have made the decision to invest in the fake annuities which weren’t going to come due for ten years or until she was in her nineties.