SAN DIEGO- On March 7, 2018, former insurance agent Shawn Heffernan, 43, of San Diego, was sentenced to nine years in prison following his February guilty plea 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 included:
- 11 counts of elder fraud,
- 16 counts of grand theft,
- one count of forgery,
- and one count of making a fraudulent tax return.
“This case took the work of local, state and federal investigators,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. “His clients trusted him to do right by them and ended up losing because of his greed. Thankfully there are skilled investigators to go after criminals such as former insurance agent.”
Heffernan promised investment returns, but instead spent the victims' money on his own personal expenses including jewelry, rental properties, a Maserati, and a lavish wedding.
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.
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.