CLEARFIELD – Yesterday, the three-day trial got under way for a financial advisor accused of stealing $120,000 from an elderly client in order to pay off a business debt.
Frank C. Stewart, 48, of Ramey is facing charges of forgery, two counts; theft by unlawful taking; and theft by deception. He’s free on $25,000 unsecured bail.
District Attorney William A. Shaw Jr. is prosecuting the case on behalf of the commonwealth. Stewart is being represented by defense attorney Ron Collins.
Judge Paul E. Cherry is presiding over the trial, which will resume at 9 a.m. today. The trial is scheduled through Friday.
The alleged victim, a 74-year-old woman, testified first for the commonwealth. She and her mother went to Stewart for help initially with handling their taxes.
According to her, Stewart was recommended by their attorney. She recalled turning tax-related paperwork over to him for 2006 and subsequent years. Stewart, she said, would then prepare and return taxes to her for review and signature.
However, she said she didn’t authorize Stewart to withdraw $120,000 from her Sun Life Financial annuity in October of 2010. She also said she didn’t authorize him to deposit it into his business account for Best Insurance and Financial.
Shaw presented the alleged victim with an annuity withdrawal request form for $120,000. When asked, she said she didn’t complete and sign it. She continued, telling jurors that he [Stewart] “filled it out for himself.”
Shaw presented her with a check, which totaled $120,000 from her Sun Life annuity. She said she didn’t endorse the check and “never got any of that money.”
Also, Shaw presented the woman with a power of attorney document. In the document, she gave power of attorney to her mother, Stewart and her cousin. The woman said she thought the power of attorney document had been prepared by Stewart.
Under cross-examination, she recalled Stewart preparing her tax returns for which she didn’t have any complaints. Collins presented her with tax documents indicting she’d received $120,000 in income from her Sun Life annuity in 2010.
The alleged victim didn’t recall previously seeing this particular tax document. She agreed if she’d received this document by mail, she would have turned it over to Stewart since he prepared her tax return on her behalf.
When asked by Collins, the woman recalled having conversations about giving “gifts” to family members and friends in order to lessen the value of her estate. She also recalled keeping “fair amounts of cash” around the house to pay bills with money orders.
Under re-direct when asked about their money and bill payments, the alleged victim explained that she and her mother kept enough money at the house to pay their utilities with money orders. She said they might have kept $1,000 but didn’t keep a large amount, such as $100,000.
She said in 2009, she and her mother got a checking account, as it made paying bills easier for them. She said it was Stewart’s idea for them to open a checking account.
Janice Shuck, regional security officer for M&T Bank, Altoona, was shown bank documents for a Small Business Administration loan for Best Insurance and Financial. She said Stewart took out the business loan and historically made interest only payments.
According to her, Stewart’s business loan ultimately totaled $99,909.12. On Nov. 4, 2010, she said he paid the loan in full, as well as $259.49 for its accrued interest. She said Stewart issued a check to pay off the loan and then his business assets, which were used as collateral, were released to him on Nov. 19, 2010.
Shuck was also shown Stewart’s checking statements for Best Insurance and Financial, which indicated he’d made a deposit of $120,000 on Oct. 26, 2010. On Nov. 4, 2010, she said a check was written from his business account for $100,168.61.
When shown the $120,000 check, Shuck said it was written to the alleged victim. However, the back of the check indicated it was “for deposit only” into an M&T Bank account for Best Insurance and Financial.
Diana Mills, a former branch manager for M&T Bank in Houtzdale, explained bank procedures for cashing large checks. The bank, she said, isn’t able to cash a check for $120,000 the same day that it’s presented by a customer.
She said the bank would need at least one week’s notice, as it must order the money and receive required approvals. She said a currency transaction report must also be completed and submitted to the security department in order to cash any check that totals more than $10,000.
In October of 2010, Mills said the bank didn’t have any customers present a $120,000 check to be cashed. Further, she said she never had a customer present one that large for cashing purposes during her tenure. Mills said if a customer presented a large check coming from another bank, they’d be required to deposit it and wait for the money to become available.
Thomas Ammerman Jr., assistant vice president of security with CNB Bank, testified that the alleged victim and her mother had a savings account at the bank. He said on Oct. 13, 2009, there was a withdrawal in the amount of $200,000, which was deposited into their checking account on the same day.
According to him, the woman and her mother had a check totaling $200,000 withdrawn from their checking account on Oct. 16, 2009. After these transactions, he said they had approximately $92,000 combined between their savings and checking accounts.
Ammerman also indicated that the alleged victim and her mother had a safe deposit box at CNB Bank. He said the bank maintains logs of the dates on which authorized individuals access safe deposit boxes. When shown logs, Ammerman confirmed that no one entered the alleged victim’s safe deposit box in 2010 and 2011.
Eric Cummings, a local attorney, testified that he was hired by the alleged victim’s cousin to prepare a power of attorney. He said on April 30, 2012, he executed the new power of attorney, which then revoked Stewart from acting as power of attorney for the alleged victim.
Shortly after that, he contacted Stewart to notify him that the original power of attorney had been revoked by the new one. He also requested any documentation he had while he acted as power of attorney for the alleged victim.
Cummings said he received cover sheets from Stewart’s attorney but didn’t receive any of the formal documents that he’d requested from him. Cummings then went to CNB Bank and submitted a power of attorney on the alleged victim’s behalf and obtained financial records.
At this time, he discovered a transaction for $200,000 in October of 2009. This, he said, prompted him to request the check written to Sun Life, as well as a copy of the alleged victim’s annuity policy.
Upon investigation he found that Stewart was the broker for the alleged victim’s annuity. Further, he found that $120,000 was withdrawn from the annuity in October of 2010 and he could neither find a matching deposit with CNB Bank nor a reinvestment with Sun Life.
Cummings explained he was still waiting on additional documents and didn’t feel he had sufficient evidence to contact police at that point. However, he noted that he’d contacted the Clearfield County Area Agency on Aging Inc. to initiate its own investigation.
When asked by Shaw, Cummings said he’d received power of attorney documents listing the alleged victim’s mother, Stewart and the alleged victim’s cousin as power of attorney for her. Upon request he read where it said the agents of the power of attorney wouldn’t comingle their funds with that of the alleged victim.
Under cross-examination, Collins argued that the original power of attorney only authorized the alleged victim’s mother to act as her agent. He pointed out that the individuals were listed in order of preference and succession.
Cummings said he didn’t believe the alleged victim’s mother was acting as her power of attorney as she was incapacitated due to her health condition. However, when asked by Collins, he said he hadn’t seen any documentation of the alleged victim’s mother being unable to act as her agent.
When asked by Collins, Cummings said his investigation didn’t turn up any documents showing where Stewart acted as a power of attorney to transfer funds from the alleged victim’s account into his own. Cummings also agreed that if everyone acted accordingly, the alleged victim’s mother would have been power of attorney.