A Fullerton insurance agent is paying the price for his role in a highly organized and sophisticated Ponzi scheme that bilked more than a million dollars from at least 18 victims, most of them Latino senior citizens.
Michael Zuno Zuniga, 43, of Fullerton, was sentenced to five years in Los Angeles County Jail and ordered to pay $1.2 million in restitution. Zuniga was arrested in June of 2012, after a joint California Department of Insurance and California Department of Justice investigation. The investigation revealed a Ponzi scheme targeting Latinos through solicitation in their homes where Zuniga issued more than $1.3 million in fraudulent securities. The 57-count complaint against Zuniga included securities fraud, grand theft, elder abuse, burglary, and conspiracy. The investigation identified 18 victims throughout Los Angeles County.
"The fact that Zuniga used his position as a licensed agent to rip off vulnerable seniors is particularly insulting," said Insurance Commissioner Dave Jones. "Anyone who targets seniors with scams and rip offs deserves the maximum sentence allowed under the law. I am dedicated to finding and bringing to justice unscrupulous people like Zuniga who violate their fiduciary responsibility in the name of greed."
Zuniga assisted many of his victims in refinancing their homes in order to invest in his scheme. He fraudulently represented that his company, Omega Investment Group, was a profitable business that for three years bought and sold real estate that was in foreclosure. Omega claimed that these types of investments were so successful they guaranteed a 15 percent secured interest annually to those who invested.
The investigation revealed that Omega had not purchased or sold any property for three years prior to January 2007. A further review of Omega's bank records revealed that it was never a profitable business and did not secure investments with property or any other assets as promised. In actuality, Omega's owners diverted $663,000, from the $1.5 million collected to purchase real estate for an undisclosed entity known as Homes Brought Current, and then used the fraudulently diverted funds for personal benefit. Additionally, in true Ponzi fashion, payments Omega made to newer investors were from prior investor funds, rather than business profit.
"It's simply devastating to think someone could be so callous as to steal from seniors who have worked hard and saved all their lives," said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. "Unfortunately there is more of this taking place than we would like to think about. Our CSLEA members who are detectives in CDI's investigation division do a fantastic job of exposing these individuals and sending them to jail or prison. Their investigations are often lengthy and complex, but they pay off.