Case Update - San Diego insurance agent charged in $1.1 million senior investment scam
News: 2018 Press Release
On Monday, February 5, 2018, Shawn Heffernan, 43, of San Diego, pleaded guilty to 29 felony counts of fraud and related charges for defrauding 16 victims out of nearly $1.5 million by soliciting investment funds. Eight of his victims were seniors. Heffernan's guilty plea includes 11 counts of elder fraud, 16 counts of grand theft, one count of forgery, and one count of making a fraudulent tax return. He also pleaded to a white collar crime enhancement under Penal Code section 186.11(a)(2). Search warrants served on Heffernan's business and bank records identified 11 additional victims. Heffernan's sentencing hearing is scheduled for March 7, 2018 at 9 a.m. in San Diego Superior Court, Department 2102.
Original release below:
San Diego insurance agent charged in $1.1 million senior investment scam
Search for more victims underway
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 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 fight insurance fraud and help 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.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.