Broker Busted for Trying to Inherit $1.8 Million from Alzheimer’s Client

The Financial Industry Regulatory Authority Inc. (FINRA) filed a complaint against Arizona broker, John Waszolek, for allegedly attempting to inherit $1.8 million from a client with Alzheimer’s disease.

Broker Took Unfair Advantage

FINRA says that in 2009, John Waszolek, who was at UBS Wealth Management at the time, “took unfair advantage” of an 81-year-old client by having her assign him as beneficiary for her trust — even though he knew she “lacked testamentary capacity” and was “completely unable to protect herself from exploitation.”

The client, a widow who lived alone in Arizona, had been Waszolek’s client since 1982. Until 2007, he would only visit her once a quarter to review her portfolio and twice a year for lunch.

Things changed in 2008, when the client’s condition continued to decline. Waszolek drove her to a doctor’s appointment where she was diagnosed with Alzheimer’s. A month later, he met with an estate planning attorney to have himself named her agent, give him power of attorney, and amend her trust to name him as a residual beneficiary.

The attorney declined, due to the client’s state of mind. So Waszolek referred her to a second attorney who amended the trust and appoint him as a beneficiary. According to the amendment, about $1.3 million that was set to be split among four charities would go to Waszolek.

The value of that amount eventually rose to about $1.8 million.

On the day after the amendment took effect, Waszolek resigned from his 30-year service at UBS and transferred to Morgan Stanley Wealth Management.

Conflict of Interest

Industry insiders point out that most securities firms have rules against brokers being beneficiaries on clients’ estates in order to prevent possible conflicts of interest.

The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.

Source: Investment News