Document text
Man admits stealing from investors Former insurance agent took $3 million from elderly clients By Chris Bristol Johnnie Lee Scott, a once-legitimate Medford insurance agent accused of bilking as much as $3 million from elderly clients and investors, has been convicted of racketeering. Scott, 59, pleaded guilty Tuesday in Jackson County Circuit Court to a single count of racketeering, which includes a variety of charges such as criminal mistreatment, aggravated theft and securities fraud. Prosecutors said that Scott, owner of the now-defunct New Life insurance agency, stole from dozens of elderly clients as part of a $90 million viatical scam allegedly organized by a pair of con artists in Palm Springs, Calif. He was indicted last year on several charges, including racketeering. Sentencing was set for April 30; prosecutors plan to ask for a five-year prison term. Scott�s son, Richard, 32, also pleaded Tuesday to a reduced charge alleging sale of an unregistered security. A sentencing date for him has not been set yet. Deputy District Attorney Matt McCauley described Scott as an insurance agent who began taking advantage of elderly clients after he started making unwise investments. Most of the fraud involved a now-bankrupt company called Personal Choice Opportunities, an investment pool that bought up blocks of viaticals � life insurance policies sold at discounted rates by terminally ill people desperate for quick cash. PCO was shut down in 1997 for mismanaging funds. McCauley said the Scotts also illegally sold securities in a company called First Lenders Indemnity, which pooled investor money to buy high-risk auto loans. Johnnie Scott "needed to raise some quick capital, and he got into things that were shady and illegal to do it," McCauley said. "He was in a position of trust, he was in a position of access, and he used both to his advantage." The senior Scott took as much as $500,000 in client money that he loaned himself as promissory notes without permission from the clients, authorities. say "He�s a racketeer," McCauley said. "He artfully used fraud and targeted vulnerable elderly persons because it was easy." Many of Scott�s victims lost everything they had. McCauley said one victim, a woman in her 90s who has since passed away, "loaned" Scott nearly $250,000. "She died literally penniless," he said. State regulators subsequently revoked Scott�s insurance and business licenses. They also warned Scott two years ago against recruiting new participants in a type of pyramid scheme known as a "gifting club." Reach reporter Chris Bristol at 776-4487, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.