SAN DIEGO -- A San Diego insurance agent is facing criminal charges for allegedly defrauding three senior citizens and two others out of more than $1.1 million by soliciting investment funds and spending the money on jewelry, a Maserati and three rental properties.
The San Diego County District Attorney's Office said it is seeking additional victims who were allegedly targeted by licensed California insurance agent Shawn Heffernan.
"This defendant took advantage of some of the most vulnerable in our community, stealing their money and leaving them high and dry for his own personal gain," District Attorney Summer Stephan alleged. "This prosecution is a great example of ouroffice's commitment to fighting financial elder abuse and helping seniors know how to protect themselves against it."
According to investigators, Heffernan's alleged fraudulent activities followed a familiar pattern. Initially,as a licensed insurance agent, Heffernan would sell annuity policies issued by legitimate insurance companies.
Before the annuity policies expired, Heffernan would often convince clients to surrender the existing policies and purchase new annuity policies, according to prosecutors.
The activity, known as "churning," would result in significant commissions for Heffernan and very substantial surrender penalties for clients, prosecutors allege. In one case, investigators identified more than $490,000 in early surrender fees and $280,000 in additional commissions collected by Heffernan.
Heffernan also allegedly convinced victims to cash out their annuity policies, or invest additional funds into vaguely defined investments directly with him.
The 42-year-old defendant provided few details and little or no documentation to his alleged victims. He would deposit the money directly into his own bank account and spend the clients' money on his own personal living expenses, investigators allege.
If a client requested to withdraw money from their "investment," Heffernan would withdraw money he solicited from later investors to satisfy the earlier investors, according to prosecutors.
Heffernan faces 14 years and four months in prison if convicted of grand theft and elder fraud.