Prudential Insurance Co. is facing a lawsuit in a rural Missouri town alleging that the company and one of its local agents conspired to defraud its annuityholders.

The petition for a jury trial, filed May 7, 2001, in Circuit Court in Macon County, Mo., alleges that Prudential agent Allen Lenzini misrepresented the benefits of annuity contracts in order to gain sales commissions. Lenzini also allegedly forged clients' signatures on documents that canceled old annuities and "sold" new ones, costing the plaintiffs thousands of dollars in penalty fees and lost interest.

Neil Maune, attorney for the plaintiffs, says the lawsuit will not seek class action status, but that he would not be surprised if other Lenzini clients step forward.

Prudential has not been served with the lawsuit papers, says spokesperson Mary Flowers, and therefore cannot comment on the case.

Among the 10 plaintiffs in the case are the widow of a former Prudential agent, a man who is quadriplegic, and an 87-year-old woman, all of whom bought Prudential annuities through Lenzini.

One woman, whose husband had been a Prudential agent, lost $100,000 in investments because Lenzini allegedly forged her name on papers that took her money out of one annuity and put it into another, without her knowledge. The original annuity contained more than $226,000. Lenzini purchased the new annuity in her name in 1999. Two years later, that annuity contained $163,000.

Another plaintiff, who became quadriplegic after an accident and received $300,000 in compensation for his injury, also claims Lenzini committed fraud by misrepresenting the annuity's annual return as "guaranteed." Although Lenzini claimed the annuity in question would have a 7 percent guaranteed return with a chance that the returns could be higher, after two years the original $300,000 investment was worth $302,000 — an annual return of around ½ percent per year.

In 1996, Prudential settled claims that its agents systematically engaged in fraudulent activities in the sale of life insurance, including churning, forgery, and misrepresentation of life insurance as investment products. The company has stated that it cleaned up its act and that current business practices preclude the possibility of further fraud.

"It's always been a standing policy with us that if policyholders have a problem with something they've purchased, we'll work with them and help them resolve it," says Flowers of Prudential.

Lenzini was not available for comment.