Planner’s CFP Designation Revoked for False Annuity – Financial Advisor IQ
The CFP Board recently made an announcement about Filippo Mastrocola, a Certified Financial Planner based in Massachusetts, whose CFP designation has been revoked. This decision came after allegations surfaced that Mastrocola mishandled funds intended for the purchase of an annuity. Originally certified in 1998, Mastrocola was found to have wired a significant portion of $228,000 earmarked for a Medicaid-compliant annuity to a third party’s account. He then transferred funds to the client’s checking account without disclosing that these were not annuity payments.
Back in 2018, Mastrocola, operating through his law firm as a licensed attorney, convinced the client to purchase the annuity using funds withdrawn from their individual retirement account. This decision resulted in a tax liability of $102,000 for the 2020 tax year, as outlined in the August 2021 order published by the CFP Board. Mastrocola then proceeded to transfer over $225,000 from the annuity proceeds to his law firm’s Interest on Lawyers’ Trust Account. He subsequently opened an attorney trust savings account for the client’s benefit and made regular transfers of $4,633.35 from the trust account to the client’s checking account, concealing the fact that these were not annuity payments.
The Massachusetts Securities Division caught wind of the situation in November 2021 and requested information from Mastrocola regarding the annuities he had assisted the client in purchasing. It was during this investigation that Mastrocola admitted to never actually purchasing the annuity for the client. In the following month, he transferred around $250,375 from his trust account to the client’s checking account and even had a gift basket delivered to the client’s home, attempting to mask the situation. He then proceeded to explain to the client that the proceeds from the IRA sales were being held in a trust account, and a portion had been paid to the client’s wife’s nursing home.
In May of 2022, the securities regulator required Mastrocola to pay restitution of $102,000 and a fine of $175,000. Additionally, he was barred from associating with or acting as a broker-dealer or investment advisor in the state. Despite regulations stipulating that Mastrocola inform the CFP Board of the Massachusetts consent order within 30 days, he failed to do so. Consequently, an interim suspension was imposed on him in August 2022, and ultimately, his CFP designation was revoked in August of the following year. Mastrocola has not been registered with FINRA or the SEC.
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