On July 24th, 2020

Poway Man Sentenced to 12 Years in Prison for $7 million Ponzi Scheme Targeting Seniors Investigated in part by California Department of Insurance, Department of Business Oversight and the Franchise Tax Board.

SAN DIEGO – On June 22, 2020, former life insurance agent Christopher Dougherty, 47, was sentenced to 12 years in state prison after pleading guilty to three counts of securities fraud, three counts of grand theft, and a sentencing enhancement for running a more than  $7 million Ponzi scheme that scammed 49 victims—31 of whom were 65 years or older at the time of the fraudulent investments.

“Thank you to the state investigators who worked with local law enforcement to bring this man to justice,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “This man  played with people’s money essentially  gambling away their financial security and futures for his own personal gain.”

Dougherty met many of his victims in his fiduciary capacity as an investment advisor for various San Diego and Imperial County school districts. In April 2013, the Department of Insurance revoked Dougherty’s license based on his conviction for the embezzlement of $84,352.54 from the Tecolote Youth Baseball League.

Dougherty leveraged his personal and professional relationships with clients and longstanding friends, in order to pitch “private” investments in various companies he owned. One of the investment opportunities Dougherty pitched was a 100-acre “organic” cattle ranch in Alpine. While the ranch was real, it did not actually generate any substantial profits for investors. Dougherty also promoted a marijuana-growing project on the Alpine property. Dougherty promised reasonable returns and low risk but provided minimal information regarding the investments. Dougherty leveraged his victims’ trust in him as their investment advisor, while failing to disclose his 2012 embezzlement conviction or the 2013 revocation of his insurance license.

Instead of using investor money to generate legitimate returns, Dougherty shuffled money around in classic Ponzi fashion, paying “profits” and returning money to complaining investors with funds invested by more recent investors. Dougherty also used investor funds for personal expenses, including home remodel, travel, college tuition, and large cash withdrawals. The Ponzi scheme collapsed once enough investors began demanding their money and Dougherty was unable to bring in new investors or solicit more funds from current investors.

In December 2018, the California Department of Insurance received information from an insurance company about a customer suing Dougherty for investment-related fraud. The San Diego District Attorney’s Office and San Diego Sheriff’s Department received similar complaints from investors. The law enforcement agencies formed a task force to investigate the complaints. Dougherty was arrested on April 25, 2019 and has remained in custody.

This case was investigated by a task force comprised of members from the California Department of Insurance, the California Department of Business Oversight, the San Diego Sheriff’s Department, and the Franchise Tax Board. The case was prosecuted by Deputy District Attorney Michael Zachry from the San Diego District Attorney’s Office, Insurance Fraud Division.

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