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CA Department of Insurance

Four Southland residents sentenced for $3.8 million scam

News: 2016 Press Release

For Release: March 18, 2016
Media Calls Only: 916-492-3566
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Four Southland residents sentenced for $3.8 million scam
50 investors targeted from Orange County, Riverside and San Diego

SAN DIEGO, Calif. — Julio Gomez, 43, the last of the four defendants who swindled California investors--many of them senior citizens--out of more than $3.8 million through marketing phony investments was sentenced today. Gomez, Richard Provencio, 64, Carmen Provencio, 60, and Carl Battie (Hampton), 57, were already sentence for their part in the fraud.

Julio Gomez, a sales agent at Masters of Retirement, Incorporated and American Equity Direct, Incorporated, who was promoted to a management position, pleaded guilty to securities fraud and perjury. Gomez was sentenced to five years of probation with 365 days in custody that can be served at work furlough.

"I find these crimes to be particularly appalling," said Insurance Commissioner Dave Jones. "I have no tolerance for those who prey on the vulnerable, especially seniors who lost their life saving to these scammers and were left in a devastating financial hole. I am committed to working with district attorneys across the state to aggressively pursue and stop criminals who think to take advantage of consumers."

The president of the investment companies, Richard Provencio, pleaded guilty to securities fraud, elder fraud, and residential burglary. Provencio was sentenced to a 15-year term in the California State Prison. His wife, Carmen Provencio, who served as chief financial officer, pleaded guilty to securities fraud and was sentenced to three years prison.

Carl Battie, pleaded guilty to securities fraud, elder fraud, conspiracy, and stipulated to a 14-year State Prison sentence. He is scheduled to be sentenced on April 8, 2016.

"The defendants in this case were ruthless and heartless in the way the targeted their elderly victims," San Diego County DA Bonnie Dumanis said. "I'm proud of the ongoing work our Insurance Fraud Division (is accomplishing) to bring justice to these victims and others who became victims of fraud and theft."

An investigation by the Department of Insurance revealed that none of the investments sold by Masters of Retirement (MORI) and American Equality Direct (AED) were secured and many victims lost their entire retirement savings to this scam. Investors were guaranteed returns way above market (7 percent to 15 percent), principal was guaranteed safe and told a number of lies in order to get them to invest. All of the $3.8 million that was collected from the victims in San Diego and Orange Counties was lost.

This case resulted from a joint investigation involving the California Department of Insurance, the Federal Bureau of Investigation, and the San Diego County District Attorney's Office. The San Diego District Attorney prosecuted the case.

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Media Notes:

Previous release:

This scheme involved a total of 50 victims over eight counties:

o   San Diego- 20 victims

o   Orange- 9

o   Los Angeles- 3

o   San Bernardino– 5

o   Riverside- 9

o   Shasta- 1

o   Fresno– 1

o   Ventura- 2

21 victims were senior citizens

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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