The elder fraud and abuse case against Wendy Jane Foster and Erica Salda came to a close on June 12 with a plea bargain in which Salda agreed to return $250,000 to the estate of Elizabeth Whitney, who died in 2018 at the age of 102. Foster had reached a similar agreement in November 2022. The case was a complicated one in which Foster, who was a trustee for one of Whitney’s trusts, worked with Salda to use Whitney’s money to buy annuities, pocket the commission, then employ a method sometimes known as “twisting and churning” to place the funds back into other annuities for Whitney. The practice continued for nine years and only came to an end when Whitney complained to her family in 2015 that her former “friends” were untrustworthy.
Between the two of them, Foster and Salda reinvested more than $3 million in Whitney’s trust accounts in this way, funds that Whitney’s husband had assembled while he worked as an engineer. He died in 1997, two years after the couple had moved to Santa Barbara to enjoy their retirement years. At the time of Foster and Salda’s arrests in 2019, their grand-daughter April Whitney said she knew her grandmother had been a mentally sharp woman who preferred to handle her own finances.
Salda was an insurance agent, and Foster was a financial advisor. Foster had befriended her client Elizabeth Whitney, who would have been in her early nineties at the time. According to the court records, the first transactions in February 2006 involved two annuities — large payments to an insurance company in order to receive regular disbursements plus interest — totaling $3 million for which Salda received a commission of $300,000. The Fourth Amended Complaint states the pair got the money from a Whitney trust but forged a family member’s signature to do so; a year later, the annuities were cashed and most of the funds went to two more annuities. Between 2006 and 2014, Salda repeatedly — 20 times or more — bought an annuity for Whitney and gained a commission, later cashed it in and got another one, ultimately reaping more than $1.2 million in commissions. In four of the transactions, the manipulations resulted in $216,000 in penalties.
Her accomplice, Foster, was at different times a trustee for one or more of Whitney’s trusts. Foster was accused of fraudulently signing documents in several of the transactions, and though they were both charged with 23 counts of grand theft, money laundering, fraud, and embezzlement, they ultimately pled guilty to a single charge of grand theft. The remaining counts were dismissed “in the interests of justice.”
Strictly speaking, the practice of cashing an annuity and reinvesting the funds to gain a commission is only an illegal case of “twisting and churning” — the twist uses more than one insurance carrier; the churn uses the same carrier — when the client is unaware of the practice. Though Elizabeth Whitney was apparently kept in the dark, in practice, Salda’s client was Foster, not Whitney, and Foster was well aware of what Salda was doing. Neither of their attorneys would comment on the case.
Both women are on two years of probation and avoided a jail term because of their prior clean records. According to prosecuting attorney Sean Brunton, the death of the prosecution’s first-person witness, Elizabeth Whitney, greatly complicated the available testimony in the case. “Trial always comes with risks, and sometimes a plea bargain represents the best balance between those risks and securing a good outcome for the surviving victims and for society,” Brunton said.
The judge’s sentence for Salda is not yet posted but is said to be similar to Foster’s. Salda previously lost her insurance license; they each must pay restitution of $250,000 to Whitney’s estate, serve two years’ probation, must not work for the elderly, and must not give financial advice or associate with “known criminals.” In essence, the Whitney estate was made whole for the various losses Salda and Foster had caused.
In a press statement, April Whitney thanked the county District Attorney and the state Department of Insurance, which primarily investigated the case, for their work: “Elder financial abuse targets people who have worked their whole lives, raised their families, and saved for retirement, when they are the most vulnerable and need guidance and protection,” she said. “We are glad to see that there is accountability for the crimes against our grandmother and the violation of her trust, and we hope this both discourages others from attempting it and makes other families aware that these crimes exist.”