Bellevue insurance producer’s license revoked for taking loans from elderly client
Arthur Cervantes borrowed at least $410,000 from a client who had Parkinson’s, dementia
OLYMPIA, WA – Insurance Commissioner Mike Kreidler revoked the insurance producer license of Arthur Cervantes and his agency, Northwest Financial Exchange, Inc., in Bellevue. He is accused of accepting loans of at least $410,000 from an elderly client who bought annuities from him.
The case was referred to Kreidler’s office by the state Department of Social and Health Services Adult Protective Services after a relative of the victim filed a complaint. The Seattle Police Department also investigated Cervantes. Under Washington state law, it’s illegal for insurance producers to obtain a loan from an insurance client unless they are a legitimate financial institution or a family member.
Kreidler’s investigation shows that Cervantes conducted business with the consumer starting in 2009, when the client was 80 years old, and their last insurance transaction was as recent as June 2015. The client, who suffered from Parkinson’s disease and dementia before his death this year, made the loans to Cervantes between February and May 2015.
Cervantes helped the client cash in four annuities he purchased from another insurance producer with a total value of $419,000. Days after the consumer deposited the funds, he issued loans to Cervantes and his insurance agency. He also loaned an additional $155,000 to a business called Del Marine that is owned by a relative of Cervantes and shares an address with his insurance business.
“I am very glad to put Mr. Cervantes out of business so he cannot take advantage of elderly consumers,” said Kreidler.
As a result of the revocation, Cervantes and Northwest Financial Exchange are banned from selling insurance in Washington state.
Kreidler’s office fined Cervantes $500 in May 2012 for misrepresenting the surrender penalty on a life insurance policy. He sold the policy to an 89-year-old client and indicated its surrender penalty was $13,637 when it was actually $24,791. From 2007 until 2010, he was not allowed to sell insurance to any clients over the age of 75 unless a relative was present under an agreement with an administrative law judge after Kreidler attempted to revoke his license in 2007. He was also fined $1,500 in 1999 for stating false information on a life insurance application.