Santa Clara Insurance Broker Charged With Wire Fraud And Mail Fraud In Alleged Theft From Widow’S Insurance Policy
SAN JOSE – Gary Thornhill was charged with wire fraud and mail fraud in connection with an alleged attempt to steal more than a million dollars from a client’s trust account, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Acting Special Agent in Charge Bertram Fairries.
In an indictment unsealed today, Thornhill, 63, of Santa Clara, is accused of using his position in a boutique insurance brokerage to withdraw funds from a widow’s client trust account. According to the indictment, Thornhill was a fiduciary who had responsibility for management and oversight of an account containing the proceeds of an insurance policy he created for a married couple years earlier. Beginning in January 2011, several years after the husband passed away, Thornhill allegedly transmitted written requests for funds to be drawn against the cash value of the widow’s insurance policy and then deposited the proceeds into an account he exclusively controlled as trustee for the policy. Throughout calendar year 2011, Thornhill allegedly withdrew almost $1.5 million from the account and put the funds into the account which he controlled and used for his own personal benefit. Thornhill is charged with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of mail fraud, in violation of 18 U.S.C. § 1341.
Thornhill was arrested today and made his initial appearances in federal court in San Jose before the Honorable Paul S. Grewal, U.S. Magistrate Judge. Thornhill was released on a $500,000 bond with conditions. His next scheduled appearance is set for Monday, May 2, at 1:30 p.m. before Magistrate Judge Cousins for review of the bond conditions.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces for each count a maximum sentence of 20 years’ imprisonment, a fine of $250,000 or twice the gross gain or twice the gross loss, plus restitution. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Timothy J. Lucey is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation the by the Federal Bureau of Investigation.