(VTDig) Two financial professionals and their Massachusetts firm will pay a total penalty of $100,000 to resolve claims they took advantage of an elderly Vermont woman with dementia.
Vermont’s Department of Financial Regulation announced Tuesday it had ordered the monetary penalty as well as other sanctions against Boston-based Account Management LLC, and Christopher de Roetth, a principal of the firm, and his father, Peter de Roetth, a firm founder.
Court records filed in July stated that Christopher de Roetth was 59, and from Duxbury, Massachusetts. His father, Peter de Roetth, was 90, and lives in New Boston and is now retired from the firm.
According to court filing, an investigation by DFR found that the two men met with the woman, now 92 and identified in court records only as “Ms Doe,” shortly after she was diagnosed with dementia.
Court records stated that she was already a client with the firm and they persuaded her to increase her multimillion dollar trust so they could keep managing her assets, for a “substantial” fee,” well after her death.
The trust, valued at more than $30 million, provided that upon her death, 90% of its assets would pass in equal shares to three beneficiaries, including two family members and a close friend, court records stated.
The remaining 10 percent would go to a “charity client favored by Ms. Doe,” according to documents. That charity was also a client of Account Management, the filing stated.
In October 2015, court records stated, Peter de Roetth visited the woman twice in Vermont “to advise” her about increasing the amount going to the charity client.
About a month later, at the request of Account Management, the woman’s estate planning counsel prepared a draft amendment to the trust. The name of that estate planning attorney is not listed in the court filing.
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“The purpose of this amendment was to make a major long-term gift to the Charity Client, and its language provided that any assets in the revocable trust not distributed outright upon Ms. Doe’s death be kept in trust for an additional 20 years for the benefit of the Charity Client,” the filing stated.
Account Management would then continue to manage that trust during that period, according to court records. However, the filing stated, Ms. Doe did not immediately sign the document.
Then, on Dec. 14, 2015, the woman’s niece emailed the firm reporting that Ms. Doe had dementia, and asked they include her family members in any future financial decision, according to court records.
A couple weeks later, on Dec. 31, 2015, the woman’s attorney wrote to the niece stating that in his opinion, Ms. Doe wanted to “significantly” increase her gift to the charity.
About a month later, on Jan. 27, 2016, Peter de Roetth traveled to the woman’s elder care facility in Vermont and the woman, in the presence of her estate planning attorney, signed the amended trust, though none of her family members were there.
The amendment increased from 10% to 85% the amount to be distributed to the charity and provided that the assets be managed by Account Management for 20 years after her death, “thereby ensuring substantial fees would be paid to Account Management into the future.”
“The following day, Ms. Doe did not remember signing the document and was unaware she had changed the disposition of her assets,” the filing stated. “She told her social worker she had been scammed.”
The social worker contacted authorities.
After an investigation, the U.S. Securities and Exchange Commission in July 2019 imposed a fine and other sanctions against the de Roetths and their firm, Account Management. The firm was fined $100,000, Christopher de Roetth was fined $50,000, and Peter de Roetth was fined $25,000.
In the SEC filing, the Vermont woman was listed as Account Management’s largest client.
In addition to the $100,000 fine from the Vermont Department of FInancial Regulation, the settlement prohibits the de Roetths and their firm from taking on new Vermont
clients.
Neither Christopher nor Peter de Roetth could immediately be reached Tuesday afternoon for comment.
Michael Pieciak, the DFR commissioner, said Tuesday afternoon the case highlights the need for people to be vigilant of their elderly parents, neighbors, and friends to help prevent them from being taken advantage of.
“Fraudsters are looking for anybody who might be vulnerable,” Pieciak said.
Asked why the conduct by the de Roetths didn’t warrant criminal charges, Piecak said both the DFR and SEC are responsible for civil matters.
“I can’t speak to that,” the commissioner replied when asked if criminal authorities are investigating the case.
