2 insurance agents in Orange County arrested, accused of defrauding investors of more than $4 million

SANTA ANA — A 63-year-old Orange County insurance executive pleaded not guilty Monday to charges in an alleged multi-million dollar investment fraud while another co-defendant awaits arraignment this month.

Robert Andrew Lotter of Newport Beach denied 20 felony charges including making an untrue statement or omission in connection with the offer or sale of a security, use of a device and scheme or artifice to defraud with sentencing enhancement allegations of aggravated white collar crime, according to court records.

Co-defendant Charles Albert Major, 71, of Irvine, an insurance agent who worked for Lotter, was charged with 27 felonies including making an untrue statement or omission in connection with the purchase or sale of a security and burglary with sentencing enhancement allegations for aggravated white collar crime, according to court records.

The two, who were arrested Nov. 24, were being held without bail, according to jail records.

In court papers, state Department of Insurance investigator Braelyn Velasco said Lotter “fraudulently sold securities to 20 victims by means of omission, misrepresentation, and through the use of a device, scheme, or artifice, Lotter’s victims lost $4,087,811.04.”

From May 2003 to May 2018, Lotter “sold investments in his companies’ eAgency Inc. and Mymobilewatchdog Inc. by the use of misleading marketing materials and tactics that led victims to believe Lotter’s insurance agency was affiliated with the California State Teachers’ Retirement System, a state agency that provides retirement pension benefits to California public school educators,” according to Velasco.

Lotter created My Mobile Watchdog, a Newport Beach-based company that helps parents use the app to keep track of web activity on their children’s cellphone.

“Victims responded to the misleading materials with the believe they were requesting a retirement analysis from (the state retirement system),” Velasco alleged.

Accredited investors were then solicited to invest in the defendant’s companies, Velasco said.

Lotter “inappropriate used his agency to access customers’ private financial information to determine if the customer was accredited, in order to solicit the customers’ investments” in the defendants’ companies, Velasco alleged.

Lotter also dangled “unrealistic and inflated financial projects of his companies” to potential investors, Velasco alleged.

Lotter also “failed to properly disclose to all victims” that investments in his companies were “high risk,” Velasco alleged.

“At least 10 victims stated there were no such discussions of the risk involved, or that such discussions did not identify the investment as high-risk,” Velasco alleged. “Some victims were told there was no chance they would lose any of their investment.”

Velasco further alleged that Lotter and his “companies continued to lull victims throughout the years into believing eAgency Inc and/or Mymobilewatchdog Inc. was making significant progress and investors would see substantial returns soon. Nearly every victim stated they were told investors would see returns within one to two years. The same message was given to victims from the early 2000s until 2018.”

Major was scheduled to be arraigned Dec. 16 in the jail courtroom in Santa Ana.

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O.C. man gets six years in prison for altering debit cards to steal money from ATMs in Louisiana

SHREVEPORT, La. — A California man was sentenced Tuesday to six years in prison for using altered debit cards to steal money from ATMs in Louisiana, Acting U.S. Attorney Alexander C. Van Hook said in a news release.

Dennis Busch, 40, of of Costa Mesa, was sentenced in federal court in Shreveport, Van Hook’s release said.

Busch was ordered to pay more than $63,000 in restitution.

The release says Busch admitted in July that he altered and re-encoded Capital One debit cards and used them along with account holders’ personal identification numbers he had obtained. Prosecutors said the illegal withdrawals took place in 2018 and 2019.

“The investigation revealed that some of the account holders had previously responded to text messages that were part of a phishing scam, which compromised their banking information. Capital One reimbursed the account holders and ultimately sustained the loss,” the release said.

 

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L.A. man sent to prison for running a lottery fraud scheme targeting Latina grandmothers in Southern California

LOS ANGELES — A Los Angeles man was sentenced Monday to 33 months in federal prison for running what prosecutors called a “depraved and cruel” fraud scheme that targeted Latina grandmothers throughout the Southland in a scam involving fake winning lottery tickets.

Tito Lozada, a 50-year-old Colombian national and Los Angeles resident, was also found jointly responsible with his co-defendants for $190,422 in restitution to victims. Lozada pleaded guilty in February to one count of conspiracy to commit wire fraud.

Prosecutors wrote that Lozada personally selected elderly women “with particular vulnerabilities” and exploited those weaknesses for his own personal gain.

Three additional defendants pleaded guilty to the conspiracy charge and were previously sentenced to prison terms ranging from 33 months to time already served.

Lozada and the others were initially charged in state court with trying to scam a 66-year-old Long Beach woman, but federal prosecutors who took the case said all four defendants were linked to over a dozen incidents since 2017 in which older women were targeted and robbed of cash and valuables in a scheme known as the “Latin Lotto Scam.”

The October 2019 federal criminal complaint referenced crimes across Southern California, including in the cities of Maywood, Long Beach, Baldwin Park, Hawaiian Gardens, Fontana, Lakewood, San Pedro, Garden Grove, Ontario, Santa Ana and Chula Vista.

The defendants approached Latina women who ranged in age from 65 to 85 years old while they were alone in public, and speaking Spanish, convinced them that they had a winning lottery ticket but needed help cashing it because they were undocumented. They would then ask the victim for money and promised they would pay her back, including some extra cash, upon cashing in the ticket.

To further con the victim, one of the co-conspirators would pretend to call a lottery official who was, in fact, a member of the plot and would falsely confirm that the fake ticket in question was a winning ticket that could be released only with a deposit or fee.

The defendants then would drive the victim to her home or bank so that she could get valuable items like jewelry or large sums of cash to pay the sham lottery ticket deposit. Once they had the victim’s money or jewelry in hand, the schemers would create a ruse to get the victim out of the car and flee, taking the valuables with them.

The fraud ring attempted to rip off at least four elderly women per day, and were out looking for potential victims for a minimum of four days per week, according to prosecutors, who called the scheme “depraved and cruel.”

In total, over the course of the nearly 2 1/2-year conspiracy, at least 16 victims were defrauded, causing losses of almost $200,000, federal prosecutors said.

“This was an organized group that singled out older women for the sole purpose of ripping off these vulnerable victims with bogus promises of a big payday,” U.S. Attorney Nick Hanna said. “While law enforcement will do everything possible to bring criminals like this to justice, this case should serve as a reminder to potential victims and their family members that no one should ever pay an upfront fee in relation to any prize, sweepstakes or lottery.”

Co-defendants Maria Luisa Henao, 44, a dual citizen of Colombia and the United States, Mercedes Montanez, 76, and Luisa Camargo, 40, pleaded guilty and received prison sentences of 33 months, 27 months and time served, respectively. Montanez and Camargo are Colombian nationals who were living in Los Angeles at the time of their arrest.

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O.C. man gets 46 months in prison for $3 million investment scam

SANTA ANA — An Orange County man was sentenced Monday to 46 months in federal prison for running a program that purported to offer short-term loans, but was nothing more than an investment scam that caused more than $3 million in losses to victims.

J. Michael Clancy, 58, of Rancho Santa Margarita, was sentenced by U.S. District Judge David O. Carter, who also ordered him to pay $3,003,084 in restitution. Clancy pleaded guilty in March 2019 to a single-count information charging him with wire fraud, according to the U.S, Attorney’s Office.

From July 2014 until July 2016, Clancy operated Multiplied Equities and Quantum Capital California LP, both located in Lake Forest, which he claimed offered short-term loans secured by real estate, according to the U.S. Attorney’s Office.

Clancy sold partnership interests to investors, telling them their funds would be used to make short-term loans. He further promised to sell the loans to outside investors, which would earn profits for his victims and free up funds to make additional short-term loans, prosecutors said.

Instead of using his victims’ funds as promised, Clancy used the money to operate a house-flipping scheme, purchase a personal residence in Silverado Canyon, pay family members, and make “interest” payments to earlier investors in the scheme, according to the U.S. Attorney’s Office.

In total, 11 victims lost $3,003,084 as a result of the scheme.

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3 family members from O.C. sentenced to jail for home loan modification scheme

SANTA ANA — A 43-year-old Yorba Linda man, his brother and the brother’s wife received jail terms Tuesday as part of their involvement in a $390,000 scheme involving loan modification companies that preyed on mostly Spanish-speaking victims throughout the state.

The ring leader, Carlos Jose Centeno, who pleaded guilty in January, was sentenced to a year in jail and placed on seven years of formal probation. He is scheduled to report to jail Oct. 30, according to court records.

Centeno’s brother, Ricardo Torres Centeno, 36, of Anaheim, who also pleaded guilty in January, was sentenced to 150 days in jail and placed on seven years probation. He is also scheduled to report to jail on Oct. 30.

Ricardo Centeno’s wife, Lizeth Garcia Arzate, 37, who also pleaded guilty in January was sentenced to 90 days in jail and placed on three years of formal probation. She is scheduled to report to jail by Feb. 12, according to court records.

Co-defendants Hector Alfredo Valdivia, 55, of Lake Elsinore, and Susie Rabadan, 36, of Anaheim, were scheduled for sentencing Sept. 9, according to court records.

About two dozen victims were bilked out of fees for helping them to renegotiate their home loans, Orange County District Attorney’s Office prosecutors said when charges were filed in January 2015.

Carlos Centeno was the ringleader, prosecutors said. He owned Foreclosure Prevention Department in Irvine and was an executive for Orange County-based Debt Settlers of America.

It is illegal to charge upfront fees for loan modification services, prosecutors said.

The Ventura County Sheriff’s Department led the investigation, prosecutors said.

Valdivia and Rabadan were considered lesser players in the scams from the end of 2009 through 2012, prosecutors said.

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2 O.C. men sentenced to prison for scamming distressed homeowners during ’08 recession

SANTA ANA — Two Orange County men were sentenced Wednesday to five and 12 years in prison for their roles in a Santa Ana-based home loan modification scheme during the Great Recession in 2008.

Aminullah “David” Sarpas and Samuel Paul Bain started Santa Ana-based U.S. Homeowners Relief in late 2008 during the collapse of the housing industry that tipped the nation into a recession.

The company promised distressed homeowners relief on mortgage payments in exchange for advance fees ranging from $1,450 and $4,200, prosecutors said. The two falsely promised they had a 97% success rate lowering mortgage payments for clients, prosecutors said.

About 1,600 homeowners lost about $3.5 million in the scheme, prosecutors said. Many of the victims lost their homes.

Sarpas and Bain also co-owned Greenleaf Modify, Waypoint Law Group and American Lending Review.

Sarpas, 37, of Irvine, was sentenced to 12 years in federal prison by U.S. District Judge Cormac Carney. Sarpas was convicted in a trial of 10 counts of conspiracy and mail fraud in April 2019.

Bain, 40, of Tustin, was sentenced to five years in prison, but has already served that amount of time behind bars, said his attorney, Kate Corrigan. Bain pleaded guilty in 2016 to conspiracy and mail fraud.

Bain “has changed his life quite a bit and Judge Carney recognized the changes,” Corrigan said.

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Woman gets probation for role in O.C.-based scheme to trade in endangered rhinoceros horns

LOS ANGELES — A woman who participated in a Garden Grove-based scheme to illegally trade in endangered South African black rhinoceros horns was sentenced Monday to three years of probation that includes a year of home detention.

Nhu Mai Nguyen, 49, formerly of the San Bernardino County city of Highland, was also ordered by U.S. District Judge Christina Snyder to pay a $2,000 fine and participate in counseling for gambling addiction during the period of probation.

Nguyen agreed to forfeit 100 gold bars seized from her safe deposit box.

Nguyen is among five defendants who pleaded guilty in Los Angeles federal court since 2012 to their roles in the smuggling conspiracy, which generated millions of dollars in profits, as well as money to purchase more contraband rhinoceros horns and pay bribes to customs officials in at least one other nation, according to the U.S. Attorney’s Office.

According to court papers, Nguyen received packages of rhino horns at a nail salon she formerly operated and transferred them to her former boyfriend, Jimmy Kha, knowing that the packages contained the horns of endangered animals. The horns were eventually shipped to China and her native Vietnam.

“I know that what I’ve done is wrong,” Nguyen told the judge through a translator, asking for home detention “if your honor would forgive me for what I did.”

In some Asian countries, where it sells for about $1,400 an ounce, powdered rhino horn is rumored to cure cancer, improve general health and prevent illness. It is also used to treat dozens of ailments, including hangovers, according to Traffic, the wildlife trade monitoring network.

Father and son Jimmy and Felix Kha, both of Garden Grove, each admitted in 2012 to purchasing white and black rhinoceros horn in interstate and intrastate commerce, knowing that the animals were protected by federal law as endangered and threatened species. Both defendants stated that they purchased the horns in order to export them overseas to be sold and made into libation cups or traditional medicine.

Both acknowledged making payments to Vietnamese customs officials to ensure clearance of horn shipments sent to that country. In addition, the Khas each admitted to failing to pay income tax owed in 2009 and 2010.

In May 2013, Snyder sentenced Jimmy and Felix Kha to 42 and 46 months in prison, respectively.

At the peak of the scheme in 2011, 448 wild rhinos had been slaughtered for their horns in South Africa alone, prosecutors wrote in court papers.

Illegal trafficking in wildlife has been ranked as the fourth most valuable illicit economy in the world, behind narcotics, guns and human trafficking, and is estimated to be worth several billion dollars a year, according to the U.S. Attorney’s Office.

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Prosecutors: Eight indicted in $123 million Southern California workers’ comp scam

RIVERSIDE — Eight employees of an Inland Empire physicians group that contracted with the state to perform services for people with workers’ compensation insurance claims are under indictment for allegedly defrauding the system in a $123 million scam that involved filling exorbitantly priced prescriptions that were not required to treat patients, prosecutors said Wednesday.

Rancho Cucamonga-based Blue Oak Medical Group came under investigation in March 2017. Evidence was presented to a grand jury in Riverside over a six-week period, after which indictments were handed down on Jan. 17.

The indictments, which were unsealed by Superior Court Judge O.G. Magno on Tuesday, name Kenneth Amodeo, 60, of Agoura Hills; Rosa Bernal, 46, of Covina; Shannon Devane, 41, of Downey; Janek Hunt, a 44-year-old Estonian national; Edgar Lozano, 52, of Porter Ranch; Matthew Rifat, 49, of El Cajon; Hector Sandoval, 54, of Sherman Oaks; and Munir Uwaydah, a 52-year-old Lebanese national.

The defendants are charged with multiple counts of conspiracy, healthcare fraud, money laundering and sentence-enhancing white-collar crime allegations.

Amodeo, Bernal and Lozano were each being held in lieu of $4.7 million bail at the Smith Correctional Facility in Banning; Devane and Rifat were each being held in lieu of $4.7 million at the Robert Presley Jail in Riverside; and Hunt was being held in lieu of $4.7 million at the Byrd Detention Center in Murrieta.

Arrest warrants are pending against Sandoval and Uwaydah, neither of whom were in custody.

Investigators from the Orange, Riverside and San Bernardino County district attorney’s offices, along with the California Pharmacy Board, compiled evidence against the eight, ultimately deciding to anchor the prosecution in Riverside County, where a number of workers’ comp claimants handled by Blue Oak Medical Group resided, according to D.A.’s office spokesman John Hall.

According to an agency statement, the defendants allegedly operated several “sham clinics” that processed thousands of patients, most of whom were prescribed “the same high-priced cocktail of unnecessary medications, regardless of their condition.”

Prosecutors allege that pharmacies managed by several of the conspirators produced the medications, for which the state was billed — even though the prescriptions were seldom, if ever, dispensed to the patients.

According to the prosecution, the defendants laundered their ill- gotten gains through various shell companies, disbursing funds to their cohorts in California, the Middle East and Europe.

Amodeo was the pharmacist allegedly directing the fraudulent operation, along with Uwaydah, a physician whose license is now inactive in California, and Rifat, an attorney, according to prosecutors.

Uwaydah is facing similar charges in Los Angeles County for a 2015 fraud case, prosecutors said.

Amodeo, Bernal and Lozano are slated to be arraigned on Feb. 6 at the Riverside Hall of Justice. Devane, Hunt and Rifat have status conferences set for Feb. 26.

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Huntington Beach, Downey men accused of preparing phony engineering documents

Two men accused of preparing phony engineering documents and falsely using the name and logo of a legitimate Rolling Hills Estates-based company were arrested Tuesday after being charged with 487 felony counts of identity theft, grand theft and forgery.

Ruben Gutierrez, 44, of Huntington Beach and Wilfrido Rodriguez, 46, of Downey were arrested at their homes, according to the Los Angeles County Sheriff’s Department.

They were charged by the District Attorney’s Office on Feb. 27 and warrants were issued for their arrests, officials said.

“It is alleged that between 2003 and 2014, the defendants prepared fraudulent structural engineering plan set pages, structural observation reports, and structural calculation sets depicting the name and logo of a local engineering company on the documents to make them appear as if they had been prepared, reviewed and approved by a licensed civil engineer,” according to sheriff’s Detective Todd Zerbel.

“The local engineering company is a victim in this crime and had no knowledge the fraud was occurring.”

Detectives with the sheriff’s Fraud and Cyber Crimes Bureau served 65 search warrants during the investigation, which identified over 735 potential victims, Zerbel said.

The alleged fraud called into question the safety of several hundred Southern California construction projects — including new homes and home additions, authorities said.

Rolling Hills Estates-based Palos Verdes Engineering Company, which has been in business since 1985, contacted the Los Angeles County sheriff’s Fraud and Cyber Crimes Bureau in April 2014 to alert it to the suspected fraud.

“Through the investigation, Wilfrido Rodriguez and Ruben Gutierrez, former employees of the firm, became persons of interest in an ongoing criminal investigation involving the potential crimes of civil engineering fraud, grand theft of money, theft of company identity and forgery of a civil engineer’s seal and signature,” according to a sheriff’s department statement issued in 2016.

The two worked for Palos Verdes Engineering as architectural and engineering drafters, officials said.

Rodriguez and Gutierrez are not licensed professional civil engineers, so the safety of structures built based on their engineering calculations and specifications was called into question.

The duo allegedly prepared engineering plans using software stolen from Palos Verdes Engineering.

Gutierrez was being held in lieu of $7.16 million bail and Rodriguez in lieu of $15.55 million, according to the sheriff’s department.

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