A retired Palolo couple invested $10,000 in 1995 with their financial planner, expecting a return on their investment no more than five years later. But after six years went by and they had received nothing, the couple contacted state consumer officials for help.

Alice, 80, and Lewis, 81, agreed to talk about their experience to help warn others to be more careful. In their case, they said a financial planner persuaded them to invest in something called "viatical settlements."

"He called me and he said he has a good investment for us," Alice said. "I hadn't heard that word. I didn't know anything about it."

The state filed a cease-and-desist order against the planner — identified in court documents as Larry Goto — who was doing business as Financial Management Services. He could not be reached for comment on this story and the last phone number for that company is disconnected.

Alice said they trusted Goto because they had attended a financial seminar he gave and he had sold them certificates of deposit before.

Viatical settlements allow life insurance policyholders to sell their policies to investors for an immediate cash benefit. In return, the buyer of the viatical settlement becomes the new owner of the life insurance policy, pays future premiums and collects the death benefit when the insured dies.

Alice said the planner told her that their payments would come on two separate $5,000 investments with terms of three and five years. It's been 10 years since they were supposed to have received their first payment and they are only now getting their initial investment back with the help of the state Department of Commerce and Consumer Affairs.

The couple, who live in a modest and well-kept home, were in their 60s then and looking for a smart but safe investment, one with better rate of return than a certificate of deposit.

Lewis said the planner indicated that doctors had diagnosed the insured people with fatal illnesses and told them: "Their life is going to be short."

But after years without payments, Alice called the planner to find out what happened. She said he first said he'd look into it, then later started talking about his children. "He never did get back," Alice said.

In the end, the insured on the first policy died after the investment company was in receivership. Because the state helped, Lewis said they got back the initial investment but no interest.

Because no one can accurately predict when even a terminally ill person is going to die, these investments are considered extremely speculative, consumer officials said.

Attorney Carolyn Yu works in securities enforcement in the state Office of the Commissioner of Securities. She praises the couple for coming forward and sharing their story to help others.

She said she worries about people who are silent victims, especially among the elderly, who are reluctant to report a problem.

"They don't want to bring shame," Yu said. "They don't want to make trouble."

She said it's important for investors to understand what they are buying. It's clear even this week that Alice and Lewis don't completely understand the complicated investment.

Yu said people need to make sure their investments are registered and that their planners are registered as well.

They are now receiving monthly restitution payments from the financial planner to make up the rest of the original investment.

Alice said they don't need to money to pay their daily living expenses but it still represents a significant amount of savings for them. They explained it was money they put aside thinking they could help make life easier for their four children and their grandchildren.

"Not because they expect anything," Alice assures, "We like to do things. I think it's nice to give them a treat."

Now, they'll be able to enjoy that money with their extended family.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.