Hauswedell, who now lives in Bakersfield, described her dealings with Baricza in interviews conducted before she entered into the settlement.
"I thought he was my friend and he was advising me right," she said. "I found out later he was just in it for the commissions."
A $50,000 Exit Fee
Nancy Clark was 83 when she bought a $125,000 annuity from National Western Life Insurance Co. in 2002. Her son, James, said she was in the early stages of dementia and mistakenly believed she would have access to all of her money if she had to enter a nursing home.
In fact, she would have to pay surrender fees of 25% if she took out more than 10% of her savings in any year during the first six years of the contract.
James Clark, a retired building inspector from San Bernardino, said his mother told him about the annuity not long after she purchased it. Clark said he was alarmed by the withdrawal charges and called the salesman, Ezra Chapman, to find out more.
The first conversation was "fairly mellow," said Clark, 58, who is suing Chapman and the insurance firm. But a follow-up call turned ugly.
"He became very irate on the phone, very vulgar, threatening, said I was crazy," Clark testified in a deposition.
By the time his mother died in 2004, the annuity had grown to $198,000. But Clark didn't get that amount; he had to pay a $50,000 surrender fee.
Garamendi's office recently joined the suit on behalf of California consumers, claiming a pattern of sales abuses by National Western.
Chapman's lawyer, Jim Williams, said his client "did not violate any law" and that there was no evidence Nancy Clark was mentally incompetent when she bought the annuity.
Kent Keller, an attorney for National Western, said James Clark could have avoided the surrender charge by taking the money over eight years instead of in a lump sum. He scoffed at the notion that elderly people are easily deceived.
"Mike Wallace is 87," Keller said. "Paul Newman is 80. Ruth Bader Ginsburg is 72. All these people seem to be fully functioning, thank you."
'Doing the Right Thing'
In retirement communities around the country, seniors with time on their hands, money in the bank and a soft spot for free meals are bombarded with sales pitches at breakfast, lunch and dinner.
Financial advisor Kevin McEnerney works Florida's Space Coast, talking up annuities over lunch at the Chart House restaurant in Melbourne.
One day last summer, he told a group of 20 seniors enjoying lunch at his expense about a "wonderful" annuity from AmerUs Group that paid interest tied to a stock market index.
"Annuities have gotten black eyes, but this is a good way to balance your money," McEnerney said. "It gives you a better return than a bank CD and yet it can grow."
Because the investor's principal is guaranteed, he added, the annuity provides a safety net: "If we're out there swinging for the fences with our retirement money and we strike out, what could happen?"
Before the salmon entrees were brought out, McEnerney invited attendees to visit his office for personal consultations.
"We treat our clients like family," he said. "If you don't like coffee and fresh-baked cookies, then our office is probably not a good place for you."
Dorothy "Dot" Eddy, 72, took him up on his offer after attending one of his Chart House seminars in 2004. Eddy put $156,000 in an annuity that provides monthly checks of $475 to supplement her Social Security income.
She said McEnerney persuaded her to purchase the annuity within her individual retirement account, playing up its tax advantages. But, she said, he didn't tell her she could get stung with surrender charges starting at 18% if she withdrew more than 10% of the principal in any of the first three years.
Eddy also said McEnerney failed to mention that the annuity's tax deferral was essentially worthless to her, because her savings already were protected from taxes in an IRA.
"I was very vulnerable and I got taken in," said Eddy, a retired middle manager for an electronics maker.
Eddy has sued AmerUs Group, alleging deceptive sales practices. Her lawyers are seeking class-action status on behalf of thousands of Florida seniors who bought similar AmerUs annuities.
AmerUs said it took Eddy's complaint seriously and would "work to resolve it as promptly as possible."
McEnerney, who is not a defendant in the suit, said that the annuity was a sound investment for Eddy and that he had explained its terms in detail.
"If I were one of those guys who doesn't follow the rules, I'd be scared, but this doesn't bother me," he said. "You have to look in your heart and know you're doing the right thing."
States with sizable elderly populations have adopted investor protections in recent years.