An insurance agent has been sentenced to nearly three years in federal prison for a scheme he devised that swindled eight people out of just under $1.2 million, including a widow with memory impairment who lost almost $900,000.
John Horvath, 73, of Bristol faced sentencing Thursday in federal court in Hartford, where a judge handed down a 34-month prison term which will be followed by two years of supervised release, according to the U.S. Attorney’s Office for the District of Connecticut.
During the proceeding, U.S. District Judge Michael P. Shea ordered Horvath to pay full restitution, federal officials said.
According to officials, Horvath was licensed by the State of Connecticut as a resident insurance producer who was authorized to sell various forms of insurance, including annuity contracts issued by Allianz Life Insurance Company of North America.
Between July 2015 and April 2021, Horvath defrauded several clients by advising them that they could achieve better rates of return through alternative investments rather than their existing annuity contracts, according to officials. He told clients he could broker and manage those investments for them.
Federal officials said Horvath was given investment funds with the expectation he would manage the funds for clients and, instead, “commingled the victim-investors’ funds with his own and used the pooled money to pay personal expenses and repay earlier victim-investors.”
Authorities believe Horvath defrauded at least eight people out of a total of about $1,189,200. One victim was identified as a widow who family members said has been suffering from “increasing memory impairment,” officials said. She reportedly lost nearly $900,000 through Horvath’s scheme.
Federal officials also said Horvath between 2015 and 2020 failed to pay $267,739 in taxes on the money he made through the scam.
The Courant in January spoke to California resident Christ Hunt, who identified himself as the brother of Horvath’s main victim, the widow who is also a cancer survivor. According to Hunt, Horvath persuaded Hunt’s sister to transfer her Merrill Lynch account to Allianz Life, based in Minneapolis, which he then used to purchase annuities, Hunt alleged.
“My sister was having memory issues and had been for a while and it was getting more serious, so we called up her alleged financial adviser Jack Horvath and said, ‘How much is left in the fund?’ And he started prevaricating and saying, ‘Oh, I can’t really tell you that, I’m not at my office right now, etc., etc.’ So that set off the alarm bells,” Hunt said.
Horvath would tell Hunt’s sister that her money was doing well but that he could get her a better return if he was allowed to invest it for her, Hunt alleged. He then would ask her to write him checks of as much as $120,000, which he used to reimburse other victims, according to Hunt.
Hunt alleged that Horvath would prefill out a form from Allianz Life for a withdrawal of $30,000 or $50,000, which would be deposited into her checking account, then Horvath would ask her to write him a check for that amount.
“(My sister) seemed to have been the bank. … When one of the other seven victims needed money, Horvath would go to my sister’s fund because that was the largest one he controlled and just take money out of that,” Hunt said. “So it was a classic Ponzi scheme of robbing Peter to pay Paul.
“We had no idea that she was cutting checks like that all the time. And the irony is (my sister is) not wealthy,” Hunt said. “The money came from basically the insurance on her husband’s life. Her husband … suffered horribly from ALS the last two years of his life, but since he knew that was happening he kept working hard.”
Upon investigating the fraud involving Hunt’s sister, authorities discovered the seven other clients Horvath victimized.
Horvath’s sentencing came after he pleaded guilty last July to one count of wire fraud and one count of tax evasion.
He is free on a $50,000 bond and has been ordered to report to prison on April 12.
Courant staff writer Ed Stannard contributed to this story.
