SAN DIEGO- On July 19, 2017, Insurance Agent Shawn Heffernan, 42, of San Diego, was arraigned on multiple felony grand theft and elder fraud charges. Heffernan was arrested at his home after an investigation revealed he allegedly defrauded five victims, three of whom were seniors, out of more than $1.1 million. He allegedly promised investment returns, but instead spent the victims' money on his own personal expenses including jewelry, rental properties, and a Maserati.
"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.
“These are the types of individuals California Department of Insurance investigators investigate on a daily basis,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. “It is simply disgusting to know there are criminal types in this industry taking advantage of hard working people, and in this case senior citizens, who placed their trust in this agent.”
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.
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.