Laguna Hills business owner sentenced to five years for equity assurance scheme
News: 2017 Press Release
"Pearson put his victims at great financial risk by selling bogus contracts," said Insurance Commissioner Dave Jones. "Thanks to the hard work of our investigators at the Department of Insurance and partners at the Orange County District Attorney's office, Pearson's crimes were exposed and he was successfully prosecuted."
Pearson was originally arrested on December 16, 2014, in Essex County, New Jersey by the Port Authority, while attempting to leave the country. He was extradited to Orange County on January 8, 2015, where he remained in custody until his sentencing. Pearson was credited for time served and released. He is on parole for the next five years.
The California Department of Insurance launched an investigation into Pearson and his business entities BDSI and SAVE USA, Inc., for marketing and selling contracts that claimed to assure the equity value of residential property for 10 years and was backed by insurers and other guarantors. Pearson told victims the contracts were backed by billions in real estate, an international bank guarantee for one hundred million pound sterling, a global insurance company, and corporate collateral assets, and that after a two-year waiting period contract holders could submit claims on their contracts—all of which was false.
The department's investigation revealed the bank guarantee was bogus, no insurer guaranteed the contracts, and the alleged collateral assets could not be found. Pearson and his businesses were not licensed by the department and the contract claims were never honored. He used the term assurance to imply to his victims it was insurance, while representing to the department it was not insurance in an attempt to avoid authority and regulation.
- Lyle Pearson entered into pleas of:
- No contest to one (1) count of Insurance Code 700 (a) transacting insurance without a certificate of authority and was sentenced to three years in prison.
- Guilty to one (1) enhancement count PC 186.11 (a)(1)/(3) of aggravated white collar crime over $100,000, and was sentenced to two (2) years in prison, to be served consecutively.
- No contest to seventeen (17) felony counts of PC 487 (a) grand theft.
- Guilty to eighteen (18) felony counts of Insurance Code 12660 engaging in business of insuring land values.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $288 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 $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.