C) C) FILED APR 19 2013 Docketed by San CHIBF FINANCIAL OFFICER JIMMY PATRONIS STATE OF FLORIDA IN THE MATTER OF: : CASE NO.: 214676-17-AG GARRY NELSON SAVAGE / ADMINISTRATIVE COMPLAINT TO: Garry Nelson Savage 362 Main Street Huron, Ohio 44839-1600 e-mail: gsavage@advancedstrategies.net Garry Nelson Savage (Respondent) is. hereby notified that pursuant to chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida (the Department) has caused to be made an investigation of his activities while licensed as an insurance agent in this state, as a result. of which it is alleged: GENERAL ALLEGATIONS 1. Respondent is currently licenséd in this state as a nonresident life (including variable annuity) agent (8-14), a nonresident life agent (8-16), a nonresident life and health agent -(8-18) and a nonresident health agent (8-40). . | 2. At all times pertinent to the dates and occurrences referred to in this Administrative Complaint, Respondent was licensed as a nonresident insurance agent in this state. —~\ } a, C-) 3. ~ Respondent is the owner, president and agent in charge of Advanced Strategies, Inc., a foreign profit corporation with a principal and mailing address of 362 N. Main Street, Huron, Ohio 44839 (Advanced Agency). 4. Respondent is the owner, president and director of Wall Street Strategies, Inc., a foreign profit corporation with a principal and mailing address of 362 N. Main Street, Huron, Ohio 44839 (Wall Agency). 5. The service fees collected by Respondent as described below were paid through _ either the Advanced Agency or the Wall Agency. COUNT I 6. The above general allegations are hereby realleged and fully incorporated herein by reference. . 7. Consumer K.A.B. of North Naples met Respondent at the Pelican Isle Yacht Club in North Naples. K.A.B. provided Respondent with information regarding her financial holdings and Respondent suggested that she purchase annuities. 8. K.A.B., then age 59, purchased two annuities through Respondent, a Midland National non-qualified annuity ending with the numbers 32 (M 32) was issued on March 23, 2011 with an initial premium payment of $50,000.00; a North American Roth IRA annuity ending with the numbers 88 (NA 88) was issued on January 19, 2012 with an initial premium payment of $7.137.45. 9. Respondent was paid commissions by the insurance companies on the sales of M 32 and NA 88. C) “—" 10. Respondent told K.A.B. that his annual fee for selling an annuity was 1% for his services and had her sign a “Service Fee Agreement” that provided for a “1% (one percent) financial planning retention fee annually.” — . 11. K.A.B. was never told that the service was optional. 12. Respondent sent’ K.A.B. billing invoices for the fee. She has paid over $2,500.00 in fees since she purchased M32 and NA 88. . . IT IS THEREFORE CHARGED that Garry Nelson Savage has violated one or more of the following provisions of the Florida Statutes which constitutes grounds for the suspénsion or revocation of his license as an agerit in this state: (a). Section 626.9541(1)(0), Florida Statutes of the Unfair Insurance Trade Practices Act, which provides that it is illegal for an insurance agent to knowingly collect as a premium or charge for insurance any sum in excess of or less than the premium or charge applicable to such - insurance, in accordance with the applicable classifications and rates as filed with and approved by the Office of Insurance Regulation, and as specified in the policy; or, in cases when classifications, premium, or rates are not required by this code to be so filed and approved, : premiums and charges collected from a Florida resident in excess of or less than those specified in the policy and as fixed by the insurer. | (b) Section 626.621(6), Florida Statutes, which provided that the Department may suspend or revoke an agent’s license or appointment if it finds that the agent in conduct of business under the license or appointment, engaged in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under the Unfair Insurance Trade Practices Act. C) C) (c) Section 626.61 10)@). Florida Statutes, which provides that the Department shall refuse to continue the license or appointment of an agent if it finds that the licensee has demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. (d) Section 626.611(1)(h), Florida Statutes, which provides that the Department shall refuse to continue the license or appointment of an agent if it finds that the licensee has demonstrated a lack of reasonably adequate knowledge and technical competence to erigage in the-transactions authorized by the license or appointment. (e) Section 626.611(1)Q), Florida Statutes, which provides that the Department shall refuse to continue the license or appointment of an agent if it finds that the licensee has engaged in fraudulent or dishonest practices in the conduct of business under the license or appointment. (f) Section 626.611(1)G), Florida Statutes, which provides that the Department shall refuse to continue the license or appointment of an agent if it finds that the licensee has misappropriated, converted, or unlawfully withheld moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. - COUNT IL 13. The above general allegations are hereby realleged and fully incorporated herein by reference. . | . 14. ° In January or February 2009, Consumer B.A.W. of Bonita Springs, then age 66, spotted Respondent’s advertisement for an insurance seminar in the newspaper. B.A.W. attended the seminar in Bonita Springs, following which B.A.W. met with Respondent and Respondent’s son Garry Savage, Jr. 15. B.A.W. purchased a Midland National annuity ending with the numbers 11 (M 11) for an initial premium payment of about $120,000.00. C) | © 16. Respondent was paid a commission by Midland National on the sales of M 11. 17. Respondent told BAW. that his fee for selling an annuity was 1% for his services. On February 23, 2009, Respondent had B.A.W. sign a “Service Fee Agreement” that ; : provided for a “1% (one percent) financial planning retention fee annually.” 18. B.A.W. was never told that the service was optional. Respondent sent B.A.W. regular billing invoices for the annual fee, at least one of which suggested that she could pay his fee by taking a penalty free withdrawal from M 11. Between 2010 and 2016 B.A.W. was billed approximately $8,000.00 for the annual fees. IT IS THEREFORE CHARGED that Garry Nelson Savage has violated one or more of: the provisions of the Florida Statutes as described under Count I above. | | COUNT I 19. The above general allegations are hereby realleged and fully incorporated herein by reference. ‘ 20. In 2004, Consumer J.C. of Naples opened multiple investment accounts with Respondent that included the purchase of a Midland National annuity ending with the numbers 13 (M 13). J.C. asked Respondent whether he charged’ any fees for his services and Respondent answered no, that he was paid “on the other end” which J.C, understood to mean that he was paid by the companies with which he dealt. 21. Respondent was paid a commission by Midland National on the sales of M 13. 22. In April 2011, J.C. unexpectedly received a bill for services from Respondent for $1,266.84, which J.C. reluctantly paid although such services had never been discussed or agreed upon between Respondent and J.C, C) | C) 23. In April 2012, J.C. received another bill for services from Respondent for $1,393.03 that J.C. refused to pay. Respondent then notified J.C. that he was dropping him as an insurance client. IT IS THEREFORE CHARGED that Garry Nelson Savage has violated one or more of the provisions of the Florida Statutes as described under Count I above. . COUNT IV . | 24. The above general allegations are hereby realleged and fully incorporated herein by reference. 25, In 2003, Consumer B.L.A., then age 77, and her husband R.A.A. (now deceased) of Ft. Myers, attended an insurance seminar conducted by Respondent. - : 26. B.L.A. and R.A.A. decided to purchase a Phoenix Life Insurance Company annuity ending with the numbers 74 (P 74). . 27. _ .Respondent was paid a commission by Phoenix on the sales of P 74. 28. Respondent never told B.L.A. and’ R.A.A. anything about a service agreement contract, although they signed many papers in conjunction with the annuity purchase. 29. After R.A.A. died in 2011, B.L.A. began to handle the family finances. On or about August 19, 2015, B.L.A. received an invoice from Respondent for “annual service” on P 74 in the amount of $1,325.19, which she paid by personal check. IT IS THEREFORE CHARGED that Garry Nelson Savage has violated ‘one or more of the provisions of the Florida Statutes as described under Count I above. COUNT V 30. The above general allegations are-hereby realleged and fully incorporated herein by reference. _ () oe C) 31. Consumer M.A. of Naples met Respondent in 2007 at a seminar he held at the Trianon Hotel in Naples. 32. In February 2007, M.A., then age 62, purchased a $1,691,637.81 annuity through Respondent from Midland National ending with the numbers 91 (M 91). Midland added a bonus to the initial premium of $186,080.16 for a total account balance of $1,877,717.97. This investment represented the vast majority of M.A.’s liquid assets, save for approximately $150,000 which she reserved for use during the first year of the contract while awaiting eligibility to take yearly withdrawals. Thereafter she took penalty free withdrawals from M 91. 33. At their initial meeting Respondent advised M.A. that he would be charging her a service fee of 1% on the annuity. On February 5, 2007, M.A. signed a service fee agreement providing for a charge of “1% (one percent) financial planning retention fee annually,” M.A. did not realize that Respondent was being paid a commission on the sale of M 91. 34. ~ Respondent’s commission on the sale of M 91 was $152,247.41 as paid by Midland National. '35. On March 27, 2008, Respondent billed M.A. a first-year fee of $18,777.18. M.A. paid that fee and continued to pay similar annual fees until 2014. At that time M.A.’s daughter, K.A., intervened and questioned Respondent as to why he was charging her mother the service fee. Respondent answered her by stating that there was no other way he could be paid for the sale of M91. - | . 36. By April 2014, M.A. had paid Respondent a total of $93,707.10 in service fees. ITIS THEREFORE CHARGED that Garry Nelson Savage has violated one or more of the provisions of the Florida Statutes as described under Count Labove. C) C) COUNT VI 37. The above general allegations are hereby realleged and fully incorporated herein by reference. 38. In late 2005, Consumer J.M.D., then age 71, and her husband D.A.D. (now deceased) of Ft. Myers, spotted Respondent’s advertisement for an estate planning seminar in the local newspaper. They attended the seminar, following which Respondent met with them in the D'Angelo home. 39. Respondent discussed annuities with J.M.D. and D.A.D. They inquired as to how he would be paid if they purchased one or more annuities and Respondent advised them that he would receive commissions from the companies he represented. 40. J.M.D. and D.A.D purchased five Midland annuities through Respondent ending with the numbers 06, 07, 08, 92 and 69 (M 06, M 07, M 08, M 92 and M 69) and one American Equity annuity ending with the numbers 53 (AE 53). 41. _ Respondent earned commissions on M 06, M 07, M 08, M 92 and M 69 and on AE 53. 42, On April 20, 2010, J.M.D. and D.A.D were asked by Respondent to sign a “Service Fee Agreement” that provided for “a 1%.(one percent) financial planning retention fee- annually” as to all their annuities. 43. | They signed the agreement out of fear that if they refused to sign the contract Respondent would restrict access to their annuities. After D.A.D. questioned the need for a service fee, Respondent agreed to waive the fee for 2010. . 44, On or about June 10, 2011, JM.D. and D.A.D received Respondent’s invoice showing the total account values for their six annuities as being $1,302,280.63 and the total C) C) service fees due Respondent for those annuities as being $13,022.80. 45. After some fee reduction negotiations, J.M.D. and D.A.D paid Respondent $6,511.40 in fees for 2011; $3,000 for fees due in 2012, and $5,000 for fees due in 2013. . Respondent did not assess any fees for 2014. -M.D. and D.A.D refused to pay Respondent’s fees totaling $13,451.91 for 2015. Thus J.M.D. and D.A.D paid Respondent a total of $14,511.40 ‘in fees. IT IS THEREFORE CHARGED that Garry Nelson Savage has violated one or more of the provisions of the Florida Statutes as described under Count I above. COUNT VII 46. The above general allegations are hereby realleged and fully incorporated herein by reference. 47. In 2005 Consumer E.B. of Naples, then age 73, met with Respondent and decided to purchase multiple annuities from him. The six American Equity annuities purchased by E.B. from Respondent ended with the numbers 60, 55, 66, 16, 99 and 92 (AE 60, AE 55, AE 66, AE 16, AE 99 and AE 92). Two Midland annuities purchased by E.B. from Respondent ended with the numbers 70 (M 70) and 58 (M 58). . 48. Respondent earned commissions on AE 60, AE 55, AE 66, AE 16, AE 99, AE 92 ~ M 70 and M 58. 49. There was no mention of Respondent charging service fees in conjunction with the purchases of those annuities. 50. On August 25, 2010, Respondent sent E.B. a “Service Fee Agreement” that provided for “a 1% (one percent) financial planning retention ‘fee annually” as to all of the annuities. The total account value for the eight annuities then totaled $988,345.47. The total fees () 0 assessed for the eight annuities and paid by E.B. was $9,883.46. 51. EB. did not retain records of similar additional fee payments he made between 2010 and 2016, but similar fees were paid by withdrawals from the annuities and some fees were paid by E.B.’s personal check. IT IS THEREFORE CHARGED that Garry Nelson Savage has violated one or more of the provisions of the Florida Statutes as described under Count Tabove. COUNT VIII 52. The above general allegations are hereby realleged and fully incorporated herein ’ by reference. 53. -In May 2011, Consumer G.W.F. of Naples purchased two Midland Roth annuities ending with the numbers 12 and 13. (M 12 and M 13). 54. Respondent earned commissions on the sale of M 12 and M 13. 55. On or about May 31, 2012, GW. received a statement from Respondent showing the account value of M 12 as $23,282.34 and the account value of M 13 as being $27,872.81. The statement indicated that the service fees due Respondent for both policies totaled. $511.55, which G.W.F. paid by personal check. 56. Respondent assessed G.W.F. similar fees for 2013. G.W.F. paid Respondent a total of $824.08 for service fees. . IT. Is THEREFORE CHARGED that Garry Nelson Savage has violated one or more of the provisions of the F lorida Statutes as described under Count I above. WHEREFORE, Garry Nelson Savage is hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking her license(s) and appointment(s) as a customer representative and insurance agent or to impose such penalties as may be provided under the 10 QO oO provisions of sections 626.611, 626.621, 626.641, 626.681, 626.691, and 626.9521, Florida Statutes and under the other referenced sections of the Florida Statutes as set forth in this Administrative Complaint. DATED and SIGNED this / gt day of , 2018. gASWO TOES a . Gregory Thomas , Director, Agent & Agency Services ' tm cau? bere er ae 1] CO) C) NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department pursuant to sections 120.569 and 120.57, Florida Statutes, and chapter 28-106, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and a petition for administrative hearing are required. The request must be filed with Julie Jones, DFS Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. FAILURE TO ENSURE THAT _ YOUR WRITTEN RESPONSE IS RECEIVED BY THE DEPARTMENT WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THER NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN AND A FINAL ORDER OF SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-106.2015, Florida Administrative Code. Specifically, your response must contain: (a) The name, address, telephone number, and facsimile number (if any) of the respondent (for the purpose of requesting a hearing in this matter, you are the "respondent"). (b) - The name, address, telephone number, and facsimile number of the attorney or qualified representative of the respondent (if any) upon whom service of pleadings and other papers shall be made. 12 C) C) (c) . A statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate. - (d) . A statement of when the respondent received notice of the administrative complaint. . (ec) A statement including the file number of the administrative complaint. If a hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. Ifa proceeding is requested and there is no dispute of material fact, the provisions of section 120.572), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Florida, or by telephonic conference call upon your request. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to sections 120.569 and 120.57(1), Florida Statutes. These proceedings are held before an administrative law judge of the State of Florida Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. Failure to follow the procedure outlined with regard to your response to this notice may result in.the request being denied. All prior oral communication or correspondence in this matter shall be considered free form agency action, and no such oral communication or correspondence 13 C) | CO) shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received before the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to section 120.573, Florida Statutes, is not available. - No Department attorney will discuss this matter with you during the time frame in which you have to request a hearing, CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing administrative complaint and election of proceeding has been furnished to: Garry Nelson Savage, by U.S. mail at 362 Main Street, Huron, Ohio 44839-1600, and by electronic mail at . gsavage@advancedstrategies.net this/ PB of: Qt , 2018. David J. Busch Senior Attorney Department of Financial Services Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Tel.: (850) 413-4146 E-mail: david.busch@myfloridacfo.com FL 7459 S991 7052 7168 57?? 14 C) | 7?) STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES IN THE MATTER OF: ' GARRY NELSON SAVAGE . CASE NO.: 214676-17-AG / ELECTION OF PROCEEDING Ihave received and have read the Administrative Complaint filed by the Florida Department of Financial Services ("Department") against me, including the Notice of Rights contained therein, and I understand my options. I am requesting disposition of this matter as indicated below. (CHOOSE ONE) 1) I do not dispute any of the Departments factual allegations and I do not desire a hearing, I understand that by waiving my right to a hearing, the Department may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including suspending or revoking my licenses and appointments as may be appropriate. I do not dispute any of the Department's factual allegations and I hereby elect a proceeding to be conducted in accordance with Section 120.57(2), Florida Statutes. In this regard, I desire to (CHOOSE ONE): {] Submit a written statement and documentary evidence in lieu of a hearing; or {I Personally attend a hearing conducted by a department hearing officer in Tallahassee; or t] Attend that same hearing by way of a telephone conference call. I do dispute one or more of the Department's factual allegations. I hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. I have attached to this election form the information required by Rule 28-106.2015, Florida Administrative Code, as specified in subparagraph (c) of the Notice of Rights. Specifically, I have identified the disputed issues of material fact. TO PRESERVE YOUR RIGHT TO.A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT ~ OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 5:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT, The address for filing is: Julie Jones, DFS Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Signature Print Name Date: Address: Date Administrative Complaint Received: Ifyou are represented by an attorney or qualified Phone No.: representative, please attach to this election formher - or her name, address, telephone and fax numbers Fax No.: E-mail 15

Docket for Case No: 18-002737PL

Orders for Case No: 18-002737PL