Financial Advisor Takes Advantage of Elderly Woman

Mrs. McKinster asked a financial planner for help after her husband entered a nursing home. The financial advisor, Roy Strong, had helped the couple establish trusts and brokerage accounts before Mr. McKinster entered the nursing home. Strong put McKinster into contact with Claire Lewis, and elder law attorney. Lewis advised McKinster to liquidate her accounts, informing McKinster that the two of them would decide where best to invest the funds after the accounts were liquidated. Strong was also present at the meeting, and agreed with Lewis’ recommendation of liquidating the accounts.

After liquidating her accounts, McKinster bought four parcels of real estate that were located by a mortgage broker. Unbeknownst to McKinster, the mortgage broker was a tenant of Strong’s and owed Strong thousands of dollars in back rent. Strong blatantly lied to McKinster, claiming he had discussed the real estate purchase with Lewis and that Lewis agreed with the purchase. Lewis, who had not agreed to the purchase, investigated the purchase and discovered that Strong received almost $10,000 in undisclosed commissions from the sell. McKinster bought the properties for $254,400, though they were eventually sold for $40,000.

McKinster sued Strong, alleging conversions, breach of fiduciary duty, constructive fraud, securities fraud, and negligence. Strong represented himself, and a jury awarded McKinster treble damages of $643,200.

See Financial Planner Pays Treble Damages for Twisting Elder Law Attorney’s Medicaid Plan to Own Advantage, ElderLaw Answers, Nov. 19, 2011.