CASE UPDATE: Orange County agent arrested in $1.6 million fraud scheme targeting elderly
News: 2018 Press Release
Mark Malatesta pleaded guilty to 23 felony counts. In conjunction with his guilty plea, Malatesta was sentenced to five years of formal probation. Additionally Malatesta paid a total of $281,959 in restitution, $110,075 to his elderly victims and $171,884 to the insurance company. Malatesta is no longer allowed to work in the finance or insurance industry. The Department of Insurance revoked Malatesta's insurance license effective April 26, 2018. Malatesta was sentenced in Orange County Superior Court, Santa Ana.
Orange County agent arrested in $1.6 million fraud scheme targeting elderly
March 12, 2018 (#027)
ORANGE, Calif. — Department of Insurance detectives today arrested Mark Malatesta, 55, of San Clemente, on 16 felony counts related to a $1.6 million fraud scheme targeting elderly southern California residents.
Malatesta, a licensed insurance agent at the time, allegedly exploited at least six elderly consumers by falsifying information on annuity applications and netted more than $135,000 in illegal commissions. Malatesta faces a range of other charges.
"Increasingly we are uncovering financial scams that target seniors," said Insurance Commissioner Dave Jones. "These crimes are reprehensible and we will continue to work with our district attorney partners to aggressively investigate and prosecute anyone who targets seniors."
An investigation revealed Malatesta convinced his senior victims to terminate their investments, causing them to lose a total of $45,000 in surrender penalties. In a classic churning scheme, Malatesta then sold them new annuities for which they did not qualify due to their advanced age. The fraudulent investments were canceled by the insurers once they discovered Malatesta provided false information.
When insurers canceled the new investments, they refunded the $1,616,897 in deposits when they refunded the victims. The department suspended Malatesta's insurance license and will pursue revocation if he is convicted of the charges. This case is being prosecuted Orange County District Attorney's Office.
- Booking photo
- What seniors should know about annuities.
- Annuity scam alert
- Charges include: seven counts of insurance fraud, six counts of residential burglary, two counts of financial elder abuse, and one count of grand theft with enhancements for white collar crime and the excessive taking of over $1.3 million.
- This case is being prosecuted under the Life and Annuity Consumer Protection Program (LACPP) grant by the Orange County District Attorney's Office. LACPP provides grant funds to counties for the prosecution of financial abuse in life insurance and annuity product transactions.
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 www.insurance.ca.gov. 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.