A California financial advisor was sentenced to 10 years and four months in state prison and ordered to pay restitution of nearly $1 million for embezzling money from his clients.
Tom Fallon, 65, was convicted of 25 criminal counts of money laundering and grand theft stemming from a scheme to take money from his clients' workers' compensation settlement checks. As required by law, the checks are to be deposited into Workers' Compensation Medicare Set Aside Accounts, which allocate a portion of workers’ comp settlements to pay for future medical services related to a worker injury, illness or disease. These funds must be depleted before Medicare will pay for treatment.
According to the Insurance Journal, Fallon had his clients deposit their checks in accounts with companies he owns, Fortis Financial Insurance Services Inc. and Legacy Group Financial, so he could embezzle $995,118 for his personal gain and to fund various other businesses. According to investigators, no WCMSA accounts were ever created at those firms.
The California Department of Insurance conducted a yearlong investigation into Fallon's crime. His license was suspended on the day of his arrest, July 19, 2017.