SAN DIEGO- On February 5, 2018, former insurance agent Shawn Heffernan, 43, of San Diego, pleaded guilty to 29 felony counts related to defrauding 16 victims out of nearly $1.5 million by soliciting investment funds. Eight of his victims were seniors.
His guilty pleas include:
- 11 counts of elder fraud,
- 16 counts of grand theft,
- one count of forgery,
- and one count of making a fraudulent tax return.
Heffernan promised investment returns, but instead spent the victims' money on his own personal expenses including jewelry, rental properties, and a Maserati.
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 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.
Heffernan is scheduled for sentencing March 7, 2018.