Additional felony charges filed against Orange County insurance agents in $7 million securities fraud scheme
News: 2021 Press Release
ORANGE, Calif. — Additional felony charges of securities fraud violations have been filed against Robert Andrew Lotter, 64, of Newport Beach, and Charles Albert Major, 72, of Irvine. The additional charges were filed after Lotter and Major allegedly defrauded 22 additional victims.
On November 24, 2020, Lotter and Major were arrested on similar charges of securities fraud and burglary after allegedly defrauding more than 20 victims out of over $4 million. With the new charges, Lotter is charged with 40 felony securities fraud violations and Major is charged with 22 felony securities fraud violations and six charges of residential burglary. The collective loss from Lotter's and Major's alleged fraud is more than $7 million to 44 victims.
An investigation by the California Department of Insurance alleges that Lotter and Major fraudulently solicited and sold victims stock certificates in Lotter's companies, eAgency, Inc. and Mymobilewatchdog, Inc.
"My Department's continued investigation into this alleged securities fraud has uncovered nearly two dozen new victims in this far-reaching scam, which now includes 44 victims who lost $7 million,” said Insurance Commissioner Ricardo Lara. “By allegedly scheming to obtain victims' private information and push them into high-risk investments, these insurance agents took advantage of their position of trust and fiduciary responsibility."
Lotter owns an insurance agency, R.A. Lotter Insurance Marketing, Inc., and Major is a licensed insurance agent. Lotter and Major contacted clients of R.A. Lotter Insurance Marketing and used various schemes to fraudulently obtain victims' private financial information in order to identify potential investors for Lotter's high-risk investments.
Lotter's insurance agency led several victims to believe the agency was authorized or affiliated with the California State Teacher's Retirement System (CalSTRS) that provides retirement pension advice to California public school educators. Some victims did not discover it was not authorized or affiliated with CalSTRS until after they had invested substantial funds in eAgency, Inc. and Mymobilewatchdog, Inc.
Lotter and Major continued to lure victims with assurances that profits from eAgency, Inc. and Mymobilewatchdog, Inc. were “just around the corner.” They claimed to have partnerships with large internet companies and prominent mobile carriers. They showed clients newspaper articles and televised interviews featuring Lotter to cement victims' confidence in their investments and mitigate concerns victims had about their investments and the continued delays of their investment returns.
Victims who did not have enough liquid assets to invest were encouraged by Lotter and Major to withdraw money from their 401(k)s and Individual Retirement Accounts (IRAs) and rollover their retirement accounts into self-directed IRAs, which were used to invest in Lotter's companies. At least one educator was convinced to withdraw money from their CalSTRS pension to invest in Lotter's companies.
Both eAgency, Inc. and Mymobilewatchdog, Inc., had poor financial statuses including unpaid financial obligations to prior investors. Lotter and Major did not make their clients aware of the poor financial statuses of the companies and they did not notify victims when the alleged lucrative partnerships fell through. Victims were led to believe their investments in eAgency, Inc. and Mymobilewatchdog, Inc. were still viable.
Lotter and Major were arraigned for these additional charges on May 12, 2021. This case is being prosecuted by the Major Fraud Unit of the Orange County District Attorney's office. The Department is also taking the appropriate administrative action against the licensees and the various insurance agencies they managed. If you feel you've been victimized or know someone who has been victimized by either Lotter or Major, please call 714-712-7600.
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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.