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Subjects of Commerce Insurance Fraud Division investigation plead guilty to multiple counts of fraud, theft by swindle

May 30, 2013

For Immediate Release:

SAINT PAUL, MN – Earlier today, 61-year-old Stephen A. Marrone of Saint Paul pleaded guilty to three counts of Theft by Swindle (counts 3, 4, and 6) in connection with multiple incidents of annuities fraud. Marrone and his co-defendant Robert S. Hertz were charged by the Ramsey County Attorney’s on August 31, 2012, after an extensive investigation, conducted by the Department of Commerce Insurance Fraud Division, uncovered an annuity conversion scheme that replaced over $4.2 million of annuities. 

“These individuals recycled their clients’ insurance policies for personal gain,” said Ramsey County Attorney John Choi. "Today’s plea helps to bring some justice to the victims in this case." 

In his plea, Marrone admitted that both he and Hertz, working on behalf of Marrone and Associates, talked clients into replacing $4.2 million in annuities with new and better products that would yield a 15-20 percent bonus for investors.  Replacement policies are not subject to commission, therefore, Marrone and Hertz made false claims to Allianz Life Insurance Company of North America that the policies were new when, in fact, they were replacement policies.  As a result of their misrepresentations, the pair received commission payments from Allianz totaling approximately $350,000.   

“Justice has been served on Marrone and Hertz for preying on helpless seniors and robbing them of their retirement funds,” said Commerce Commissioner Mike Rothman. “Investors, especially retirees, should not have to worry, and scammers like these must be held accountable.  We appreciate everyone’s cooperation in this matter.”

For his crimes and guilty plea, Marrone agreed to 20 years probation, no more than 240 days in custody, and $360,847.93 in restitution. Judge Lezlie Ott Marek will preside over the final sentencing on July 12.   

Consumers with questions or concerns about their insurance policy can contact the Commerce Department’s Consumer Help Line at (651) 296-2488 or (800) 657-3602, or by email to  If you suspect you are a victim of fraud or would like to anonymously report insurance fraud, call the Commerce Department Insurance Fraud Division at 1-888-FRAUD-MN.

Criminal Complaints/Indictments

Stephen A. Marrone Complaint (.pdf) 
Robert J. Hertz Complaint (.pdf)