DES MOINES, Iowa – A Clive man was sentenced on June 12, 2024, to 18.5 years in federal prison for wire fraud and an additional six months for criminal contempt of court. He also was ordered to pay over $2.4 million in restitution to the victims of his fraud.

According to public court documents and evidence presented at sentencing, Zachary James Flaherty, 48, conducted a vast fraud over the course of seventeen years. From 2006 to 2023, Flaherty defrauded over thirty individuals out of all or portions of their retirement savings and other monies—in all, Flaherty’s victims lost over $3 million. Flaherty’s victims were from Iowa, Kansas, Missouri, and Nebraska; nearly all the victims were elderly, with the oldest being ninety-three years old at the time of the fraud. Most of the victims had limited financial knowledge.

Flaherty developed close relationships with his victims—he took them out to eat, bought them gifts, and helped with chores around their house. At least six of Flaherty’s victims were recently widowed when he exploited them, and Flaherty assisted with funeral arrangements or related matters for multiple victims’ spouses.

To gain access to his victims’ monies, Flaherty lied to his victims about numerous matters, including information about the returns and bonuses they could receive by investing with him, their ability to make penalty-free withdrawals of their funds, and the losses they could incur. Once his victims had “invested” with him, he continued to misrepresent and conceal information about the returns the victims were earning, the amount of money victims had invested, and the costs and penalties associated with the investments.

Flaherty primarily used two approaches to defraud his victims. His first approach was to encourage his victims to write checks to him or one of his businesses and promise his victims that he would invest the funds on their behalf. Victims trusted Flaherty’s statements and wrote him numerous checks. But Flaherty did not invest the funds on his victims’ behalf as he had stated; instead, he spent the money on himself, his family, and his businesses.

Flaherty’s second approach was to invest his victims’ funds into annuities. Flaherty was licensed to sell annuities in multiple states, and by purchasing annuities for his clients, Flaherty received over $1 million in commission payments from insurance companies. To obtain annuities on his victims’ behalf, however, Flaherty submitted documents to insurance companies which contained false misrepresentations, including forged signatures for his victims.

Flaherty’s elderly victims were not financially situated to invest in annuities. Annuities are long-term investments which typically take years to fully vest. If the owner of the annuity withdraws or cancels the annuity before it vests, then the owner usually must pay penalties, taxes, and other fees. Flaherty misrepresented the extent of the penalties, taxes, and fees his victims would suffer by investing with him, and he repeatedly encouraged his victims to withdraw funds and cancel annuities. Taking Flaherty at his word, his victims withdrew money and cancelled annuities, resulting in victims suffering massive amounts of losses.

Numerous victims spoke at sentencing about how Flaherty’s actions had betrayed their trust in him, shattered their faith in other people, and left them with limited financial resources. Several victims lost nearly all their life savings; others can no longer afford medical or assisted-living care. Victims also reported suffering health problems as a result of the increased anxiety and stress caused by Flaherty’s crimes.

Flaherty’s conviction for criminal contempt of court resulted from his violations of court orders issued in February 2024. Those orders prohibited Flaherty from selling or dissipating his personal property, which could be used to pay some of the money back to victims. Yet, Flaherty sold and attempted to sell and conceal several assets in March and April 2024, including guitars. Evidence at sentencing established that since being charged with federal crimes in April 2023, Flaherty repeatedly violated court orders applicable to him.

“Elder financial fraud causes devastating losses to its victims. Zachary Flaherty’s actions targeting the retirement savings and fixed incomes these victims spent a lifetime earning were an unprecedented betrayal of the trust they placed in him. The severity of Flaherty’s 228 months’ sentence, and $2.4 million in restitution, only partially compensates for the deep financial harm caused by his conduct. The heartbreaking impact of this type of crime can leave victims fearful for the future and wondering who to trust. Some helpful keys to combat these crimes are accountability and awareness,” said United States Attorney Richard D. Westphal for the Southern District of Iowa.

United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Iowa Insurance Division’s Fraud Bureau and the Federal Bureau of Investigation investigated this case, with assistance from the Ankeny Police Department, the Clive Police Department, the Des Moines Police Department, and the Iowa Department of Public Safety’s Division of Criminal Investigation.

To report elder fraud, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at https://www.ic3.gov. To learn more about the Department of Justice elder justice efforts please visit the Elder Justice Initiative page: https://www.justice.gov/elderjustice.

DES MOINES – Gov. Kim Reynolds today announced her appointment of Susan Cole as a district associate judge in Judicial District 8A.  Cole, of Moravia, Iowa, serves as the Appanoose County Attorney. She received her undergraduate degree and law degree from Drake University.

Cole fills a vacancy created following the retirement of the Hon. Kirk A. Daily. Judicial District 8A includes Appanoose, Davis, Jefferson, Keokuk, Mahaska, Monroe, Poweshiek, Van Buren, Wapello, and Washington counties.  

(Neola) – In an update to our earlier report, the Iowa State Patrol has released the name of a toddler who was struck in the parking lot of a Neola area convenience store June 5th, and who died from their injuries. The two-year-old was identified as Keondre James Johnson, of Omaha, NE.

He was struck in the parking lot of a Kum & Go, east of Neola. The patrol previously identified the driver of the vehicle that struck the child, as 67-year-old Rebecca Wood, of Walnut.

The accident happened as Wood was driving a 2024 Chevrolet Equinox slowly past the fuel pumps when Johnson ran across her path and was hit.  Johnson was taken by Neola Fire and Rescue to Mercy/UNMC in Omaha, where he was pronounced dead.

DES MOINES, Iowa – Officials with the U.S. Attorney’s Office for the Southern District of Iowa report a Waukee man pleaded guilty June 10th to wire fraud and money laundering charges.

According to public court records, 51-year-old William Jack Berg sold life insurance, annuities, and similar products to individuals in Central Iowa, Saint Louis, and other regions while acting as a financial advisor to many individuals in these areas. From at least January 2019, and continuing to May 2023, Berg defrauded over a dozen individuals by encouraging them to withdraw money out of the individuals’ pre-existing investments or financial accounts and transfer the withdrawn money to Berg for investment through “W Holdings of Iowa” and/or “Excel Performance Management.”

The targeted individuals provided Berg with over $1.5 million that Berg did not invest for their benefit. Instead, Berg used the money for Berg’s personal expenses including vehicles, jewelry, rent, travel, groceries, gas, clothing, and dining out. One such expense included a check written from Berg’s bank account in February 2022 to a Clive jewelry store in the amount of $37,343 for the purchase of a custom 14 karat white gold engagement ring featuring a 2.20 carat oval cut diamond and an additional 38 diamonds weighing 1.04 carats in total.

A part of his plea, Berg agreed to forfeit this engagement ring and other jewelry purchased with fraudulently acquired monies. Berg also used the money to make payments to other individuals as purported “returns” or “dividends” on previously received money despite Berg had already spent those individuals’ monies. Berg admitted to making false and fraudulent representations to his victims for the purpose of enriching himself at the expense of the victims.

Berg is scheduled to be sentenced on October 11, 2024, and potentially faces up to twenty years in prison for wire fraud and up to 10 years in prison for money laundering. A federal district court judge will determine the sentence Berg will receive after considering the United States Sentencing Guidelines and other statutory factors. Berg will also be ordered to pay restitution to all victims of his fraud scheme in an amount to be determined by the sentencing federal district court judge.

United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Iowa Insurance Division’s Fraud Bureau and the Federal Bureau of Investigation are investigating the case. Assistant United States Attorney Adam J. Kerndt is prosecuting the case.

(Radio Iowa) – Iowans who grew up in four northwest Iowa counties may be eligible for incentives to return to the area after they earn a college degree. Iowa Lakes Corridor Development Corporation represents Buena Vista, Clay, Dickinson and Emmet Counties. Curt Strouth, the foundation’s C-E-O, says the “Homegrown Talent” initiative will offer scholarships of up to six-thousand dollars.

“We’ll provide those payments in installments over four years, at $1500 per year, and we’ll pay those directly to the student’s loan provider, so we’re excited about that,” Strouth says. “Everybody’s looking for ways to reduce that student loan debt and this will be a way for us to accomplish that by helping the student, but more importantly bringing those kids back here to northwest Iowa.” The foundation is setting up a scholarship committee to review applications.

“There’ll be procedures in place on how we need to score the applications,” Strouth says, “and maybe some specific sectors of the workforce that we need to identify.” The Iowa Lakes Corridor Foundation will host a golf tournament in Spencer on August 5th as its first fundraiser for the project.

Other communities have taken similar steps in hopes of luring natives to move back. For example, the City of Clinton and Clinton County have a Student Loan Assistance Program that provides eligible residents 30 dollars a month for up to five years to pay off student loan debt.

(Radio Iowa) – A small-town bar in northwest Iowa that’s scheduled for demolition is getting a second lease on life, thanks to its cult following and far-reaching popularity as a live music venue. This week, the Pomeroy City Council confirmed Byron’s Bar will close at the end of July due to structural damage. Owner Byron Stuart says there are now plans to construct a new building about a block away from the current location on Main Street.

“I want to keep live music going,” Stuart says. “It soothes my soul and it soothes a lot of other people’s souls. In order to keep it going. I’m going to need some more money.” A GoFundMe fundraiser that started earlier this year has brought in more than 76-thousand dollars for the project that’s expected to cost 200-thousand. Organizers say mailed-in donations take the total received over 105-thousand dollars.

“I’m overwhelmed with the love being thrown at me,” he says. “I certainly appreciate it. I didn’t know I affected that many people’s lives.” Byron’s was built in the 1890s and attracts musical acts from all over the country. The new location is expected to be ready to rock-n-roll by this fall. Until then, Byron’s will host events at the Pomeroy Community Center.

https://www.gofundme.com/f/build-byrons-in-pomeroy/

(Radio Iowa) – A fund has been set up to help cover medical expenses for a five-year-old girl who was struck by an S-U-V while she was riding her bike in Ruthven. The hit-and-run happened Sunday night and the girl was flown to a hospital in Sioux Falls, South Dakota. The five-year-old’s great aunt says the child had a punctured lung and internal bruising and doctors were concerned about a head injury.

The girl, who has stitches on her face and an ankle injury, has been released from the hospital. A “Benefit for MacKenzie” bank account at the Ruthven State Bank has been established and the family says all proceeds will go towards medical bills and care for the girl.

The Palo Alto County Sheriff says 22-year-old Laticia Whiting of Estherville fled the scene after hitting the girl. Whiting was arrested late Sunday night in Spirit Lake.