Orange County agent arrested in $1.6 million fraud scheme targeting elderly
News: 2018 Press Release
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 $1,616,897in 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.
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- 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.
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.