A former Vancouver resident was recently sentenced in San Diego to serve 11 years in a California state prison and pay $3 million in restitution for operating a phony insurance company and bilking elderly clients.
Michael B. Woodward, 50, pleaded guilty to residential burglary, theft from an elder, theft greater than $500,000, transacting insurance without authorization and failure to file a state tax return.
His wife, Melissa J. Woodward, 48, pleaded guilty to failing to file a tax return and was sentenced to probation.
When Woodward lived in Vancouver and was selling plans to senior citizens, he was investigated — nearly two dozen times by one agency alone — but never charged with a crime.
The prosecution of Woodward, who had his license to sell insurance revoked in Washington and Oregon, was the result of an investigation by the California Department of Insurance and the San Diego County District Attorney’s Insurance Fraud Unit.
The Woodwards were arrested April 10 at their home in Las Vegas and extradited to San Diego, according to a news release from the San Diego County District Attorney’s Office. They entered their guilty pleas in June and were sentenced on Aug. 8 in San Diego County Superior Court.
400 victims
Their approximately 400 victims in California, including more than 200 people in San Diego, ranged in age from 80 to older than 100.
“(The Woodwards) would target elderly senior citizens at their homes, telling them that for a prepaid annual fee, the victim could get an unlimited amount of non-medical services such as cooking, cleaning, bathing, toileting, dressing, laundry and shopping. To receive services, he told the victims, they should call him and provide a doctor’s note.”
But the Woodwards were the business’ only employees, according to the San Diego District Attorney’s Office.
The most Woodward would do for clients was hire a third party to provide services, or reimburse clients after they had to pay out-of-pocket.
Inexpensive claims were often paid, but other times Woodward would reject claims or not return phone calls.
“The defendants in this case were ruthless and heartless in the way they targeted the elderly and sold them fake insurance policies,” San Diego County District Attorney Bonnie M. Dumanis said in a news release.
Woodward’s “fraudulent activities in San Diego follow similar actions in other states including Washington, Oregon, Minnesota and Texas. In all, be bilked victims out of nearly $6 million across the nation,” according to the press release. “When dealing with senior citizens, he often used fake names such as Mike Woods or Mike Smith, making it difficult to research his past.”
Nearly $2 million in assets, including a home and condominium in Las Vegas, jewelry and artwork, were seized from the Woodwards and will be liquidated to help pay restitution, according to an article in The San Diego Union-Tribune.
Investigated locally
On Thursday, Rich Roesler, public affairs manager for the Washington Office of the Insurance Commissioner, said records show Woodward was investigated at least 23 times.
“That is highly unusual,” he said. “In multiple cases, he provided satisfactory explanations, but in others he was formally reprimanded and, ultimately, we revoked his license.”
Roesler said Woodward was licensed to sell health and life insurance (including annuities) from 1991 to 2002, when his license was revoked for being “incompetent and/or untrustworthy.” Woodward was authorized to sell insurance on behalf of more than two dozen different insurance companies.
The case that resulted in the revocation involved an 85-year-old woman who was reportedly not in good physical or mental health, but who used her life’s savings to buy an $110,000 annuity.
“Annuities are insurance contracts that provide a steady stream of income in exchange, typically, for a lump sum payment upfront,” Roesler said. “We had substantial concerns about the appropriateness of selling a woman in her situation the annuity that Mr. Woodward sold her.”
The insurance company ultimately agreed to refund the full amount, plus interest, Roesler said.
Roesler said his files showed that when Woodward’s license to sell insurance was revoked in Oregon, he appealed but the revocation was upheld because Woodward’s actions were “egregious in that he targeted the elderly.”
Woodward was also the subject of complaints to the Washington Attorney General’s consumer protection division.
And in 2004, Woodward entered into an agreement with the Oregon Department of Justice over the sale of service contracts, similar to the type he sold in California, under the name Secure Tomorrows. The agreement said if six or more complaints were filed within a year, state officials could ask a judge to find that Woodward violated the Uniform Trade Practices Act and impose a civil penalty.
Stephanie Rice: 360-735-4508 or stephanie.rice@columbian.com
