San Diego insurance agent charged in $1.1 million senior investment scam
News: 2017 Press Release
SAN DIEGO, Calif. - Insurance agent Shawn Heffernan, 42, of San Diego, was arraigned today on multiple felony grand theft and elder fraud charges. Heffernan was arrested at his residence yesterday after an investigation by the San Diego Regional Fraud Task Force revealed he allegedly defrauded five senior victims out of more than $1.1 million promising investment returns, but spent the victims' money on his own personal expenses including jewelry, rental properties, and a Maserati. Three of Heffernan's victims were seniors.
"Heffernan's alleged crimes are reprehensible," said Insurance Commissioner Dave Jones. "Heffernan violated his fiduciary responsibility when he used his position of trust to take advantage of vulnerable seniors by taking their money and using it to live the high life."
According to investigators, Heffernan initially sold annuity policies issued by legitimate insurance companies, but then convinced clients to surrender their annuities and purchase new ones with different insurance companies, which resulted in him collecting substantial commissions for the new sale, but cost his victims large early surrender penalties. In one case, investigators identified more than $490,000 in early surrender fees for the client and $280,000 in additional commissions collected by the defendant.
Evidence revealed Heffernan allegedly convinced victims to cash out their annuities or invest additional funds into vaguely defined investments. Heffernan then deposited the money into a personal bank account and spent it on his living expenses. If a client requested to withdrawal money from their investment, Heffernan used money taken from new investors to satisfy the earlier investors.
"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," said San Diego District Attorney Summer Stephan. "This prosecution is a great example of our office's commitment to fighting financial elder abuse and helping seniors know how to protect themselves against it."
A team of law enforcement officials from a number of agencies worked on this case, including the investigators from the California Department of Insurance, the U.S. Secret Service, and the San Diego District Attorney's Office.
Investigators are concerned Heffernan may have more victims and are urging anyone who did business with Heffernan and believes he may have defrauded them to contact the California Department of Insurance at (858) 693-7100.
The criminal complaint includes five felony counts of grand theft, three felony counts of elder fraud, and an aggravated white-collar crime enhancement. If convicted of all charges, Heffernan faces a maximum sentence of 14 years in state prison.
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- The San Diego County District Attorney's Office, the San Diego Police Department and the U.S. Secret Service assisted with the arrest.
- The California Department of Insurance is taking appropriate administrative action against Heffernan's agent license.
- The San Diego Regional Fraud Task Force, includes investigators from the U.S. Secret Service, the San Diego District Attorney's Office, and the San Diego Police Department.
- Booking photo is available.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 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 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.