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A federal judge sentenced former Hawaii and California licensed insurance broker Kevin Loux on Monday to nearly four years in prison for stealing more than $400,000 from elderly clients.
Loux, 63, pleaded guilty in September to a wire fraud charge for persuading one of his clients to transfer money from a mainland bank account to a local account, purportedly to place in higher-yield investments.
Instead of investing his clients’ money, Loux used it instead to pay his personal expenses,to supplement his income and to create the illusion of legitimate financial returns by using money from later investors to pay earlier investors, he said in his plea agreement.
Kristi Meyers, who said her parents, Clarence and Sharon Nonaka, lost their retirement savings to Loux, urged U.S. District Judge Susan Oki Mollway to impose the maximum penalty under federal law for the wire fraud plus one year under state law for giving her father a bad check. The maximum prison term for the wire fraud is 30 years.
Meyers told Mollway that the theft of her parents’ money has taken an emotional and physical toll on the family.
"It has made us angry and bitter," and Loux "has made my parents feel like fools, feel stupid," she said.
Mollway said that in cases like this that involve financial loss, she tries to impose a sentence that gives defendants time after their prison terms to earn money to pay back their victims. She said because of Loux’s age and loss of his professional license, and the age of his victims, she said she sees little chance for the victims to recoup their losses.
She told Loux he deserves a long prison term because he targeted vulnerable people, his clients were in their late 60s to 90s, he abused his position of trust, his victims were insurance clients for 10 or more years, and that he carried on the scheme for so long, from 2009 to last year.
Mollway sentenced Loux to 46 months in prison followed by five years of court-supervised release.
Loux has until Feb. 23 to turn himself in to begin serving his sentence.
Mollway also ordered Loux to pay his victims back: $145,472 to the Nonakas, $44,850 to a couple in Indiana and $226,864 to a woman in California.
During his five years of supervised release, the court will regularly review his financial situation and garnish any wages it determines he is able to repay his victims. Loux must either find work during those five years or perform up to 20 hours per week of community service.
Loux has four adult children and two minor ones. He pleaded with Mollway not to separate him from his 11-year-old daughter, who he said is pre-diabetic, and 8-year-old son, who Loux said suffers from seizures. He also said his oldest daughter was recently diagnosed with cancer.
"Please, your honor, have mercy on me. I deserve to be punished, but please don’t make it any worse," he said.
