Published: May 17, 2009 10:18 pm      

Insurance agent charged with fraud

Allegedly stole more than $550,000 from clients

COVINGTON — A Greenup County insurance agent has been charged by the federal government with running an illegal Ponzi scheme that defrauded his clients out of more than $500,000 during five years.

Robert W. Rister was charged with frauds and swindles in a criminal information filed Friday in U.S. District Court in Covington.

A criminal information carries the same weight as a grand jury indictment. By signing one, a defendant agrees to bypass the grand jury process. The filing of an information does not establish guilt.

According to court records, Rister worked as an independent insurance agent, doing business in South Shore as Rister Insurance & Financial Services. His business consisted of selling various types of financial instruments, including insurance and annuities.

What Rister did, the government alleges, was convince certain clients who had purchased annuities from him to close out their accounts and reinvest in different funds. Once he did so, he would then allegedly misappropriate their liquidated funds for his own personal use.

Rister’s scheme generally was executed in one of two ways, according to the information. In some cases, he would simply fail to reinvest the money altogether, depositing it instead into his business bank account and using it for personal purposes.

Other times, Rister would allegedly hold off on reinvesting the withdrawn funds for months and in the interim use the money to pay off other outstanding obligations to conceal his scheme.

“In this way, Rister’s scheme was in the nature of a so-called ‘Ponzi’ scheme,” the information states.

Overall, Rister allegedly stole or improperly diverted $550,000 from his clients between August 2003 and June 2008.

The information also charges Rister with using the U.S. Mail to carry out his scheme.

If he is convicted, Rister could be sentenced to 20 years in prison, be ordered to pay restitution to his clients and be fined up to $25,000. However, any sentence he might receive would be imposed after consideration of federal sentencing guidelines.

KENNETH HART can be reached at khart@dailyindependent.com or (606) 326-2654.