(Polk County, IA) -- A Clive man's been sentenced to 18,5 years in prison for wire fraud and six months for criminal contempt of court. Forty-eight-year-old Zachary Flaherty has also been ordered to pay more than $2.4 (M) million in restitution. Court documents state Flaherty conducted a vast fraud over 17 years. He was accused of defrauding 30-people out of of all or part of their retirement savings. Investigators say the individuals were from Iowa, Nebraska, Missouri, and Kansas. Nearly all of them were elderly.
Investigators say 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.
Court documents state 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.
Flaherty's encouraged 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. 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 invested 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.