News


FDLE Announces the Arrest of Manatee Securities Broker and Insurance Agent for the Theft of $6.5 Million in Client Investment Funds

11/16/2007
 
The Florida Department of Law Enforcement (FDLE) and the Florida Office of Financial Regulation announce the arrest of Michael Owen Traynor, 57, in connection with a multi-jurisdictional theft of client’s investment and insurance funds totaling approximately $6.5 million. Traynor, a former licensed investment securities broker and insurance agent, turned himself into authorities this afternoon at his attorney’s office in Tampa as a result of an FDLE warrant charging him with one count of first-degree felony grand theft. According to the FDLE arrest affidavit, between July 1, 2001 and Feb. 28, 2007, Traynor stole funds from at least 34 of his clients from Manatee, Sarasota and Hillsborough counties. Many of the victims were elderly and trusted him as a result of being fellow church members of his Manatee congregation.

Traynor was found to have misrepresented the victims’ by purporting that their investment funds were being invested with one of three entities: (1) INTERSECURITIES, INCORPORATED (ISI), (2) CGU, or (3) ALLIANZ LIFE INSURANCE COMPANY. Traynor told the victims their funds were deposited in either a freedom money market account or freedom bond account that paid a guaranteed interest rate of 8 percent tax-free annually. The investigation revealed that after receiving funds from the victims, Traynor provided them with fraudulent account statements under the letterhead of the above entities, thus furthering his misrepresentation as to where victims’ funds were located. The investigation further revealed that the victims’ investment funds were never forwarded to either of the entities but kept and used by Traynor to further his scheme to defraud. Authorities have characterized the scheme used by Traynor as a classic Ponzi scheme that used the funds in three ways:

(1) A portion of the funds were traced back to earlier investors who had been victimized through a similar securities and/or insurance fraud, but had obtained their funds before the discovery that a scheme was being conducted; or

(2) A portion was found to have been used to pay for expenses that promoted his overall scheme to defraud other investors. Traynor used the victims’ own funds to pay expenses of his business, giving the appearance that he was successful;

(3) And finally, a portion of victims’ funds was also traced back to Traynor as compensation to himself.

FDLE and the Office of Financial Regulation warn citizens to use caution when making financial investments, to ask for receipts or confirmation of transactions and to be sure their checks are made out to reputable financial organizations.

Traynor was taken into custody and held under a$7 million bond set by Judge Walter R. Heinrich, Hillsborough County Court. The case is being prosecuted by the Florida Office of Statewide Prosecution due to the fact the theft took place in three Florida counties.

For more information, contact:

Trena Reddick
Public Information Officer
FDLE - Fort Myers
(813) 878-7239 or 878-7300