In the insurance industry, producers often are pushed to build customer relationships and bring in new business. Y
et “the working environment has become so demanding that employees and managers are being pushed to find the gra
y areas to increase the corporate bottom line,” cautioned John Borbi.
Borbi should know. A former financial advisor and investment spe
cialist, he went from being one of the nation’s leading advisors, manag
ing close to $100 million dollars for his clients and ranking in the top 1 percent nationally, to becoming a financial thief and spending two years in federal prison in West Virginia.
Borbi noted from his first-hand experience how easy it to “go down the wrong path.” When someone breaks th
e law by speeding, talking on a cell phone while driving, or stealing office
supplies, it’s easy to justify those actions. But what happens every time someone crosses the line is that it becomes easier to justify those decisions, and the line keeps moving, he said.
In sharing his story with the insurance community in San Francisco, Borbi said he hoped others would learn to better manage their own moral and ethical dilemmas.
Borbi, formerly a securities broker and investment advisor employed by MML Investor Services Inc., said he started o
ut as an investment specialist because he enjoyed trading stocks ev
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er since he was a teenager and he wanted to help individuals grow their personal income. “Society teaches us that if we’re passionate about something, we’ll be successful at it,” he said.
This proved to be true. As Borbi helped invest others’ money, he simultaneously grew his own income from $28,00
0 in his first year to $60,000 by his second year, $120,000 his third yea
r, and eventually $500,000 within seven years. Because of that success, he also was asked to manage and train 140 other employees in his company. With such
an excessive income and track record in advising others, Borbi said he “grew into an ego-driven person who had fil
led his head with all of this pride and ego. Greed became an addiction.” He thought nothing of spending an entire two-week $44,000 paycheck in one weekend in Las Vegas, as an example.
Yet Borbi’s moral code was tested in 2001, when the stock market fell. One of his clients wanted to withdraw $50,0
00 that he no longer had in his account because of investment losses. And instead of admitting that his investment p
ortfolio choices had lost their value, Borbi said he instead began to cover the clients’ losses by transferring assets illegally from another customer and comm
itting wire fraud. He said although he knew what he was doing was wrong, he justified his action because his pride an
d ego led him to believe that he would make up the losses without the customers noticing.
“Society teaches us that next year will always be better,” he said. “Tomorrow is always around the corner, but that doesn’t allow us to enjoy what we have today.”
Within a seven-month period, Borbi transferred close to $500,000 and was caught when his biggest client noticed the illegal transfers. Yet even when he admit
ted his guilt, Borbi said it took prosecutors two years to sentence him, because they saw him as a model citizen.
“Because [people thought] I would never commit that crime, I was the perfect person to commit the crime,” Borbi said,
noting he was in the top of his class in college, in the national honor society, well-liked, and even the compliance officer within his firm.
Eventually, however, his crime led to a 30-month sentence in federal prison, in which he served from 2004 to 2006
in West Virginia. Instead of living in a 4500-square-foot home, Borbi lived in a 40-square-foot space, slept on a steel bed, and lived off prison food plus the 12 cents
per hour he earned teaching a GED course in prison. He said he lost everything, including his wife, and is required to pay back his clients’ losses and taxes.