An insurance agent from San Diego was arraigned Thursday on multiple felony grand theft and elder fraud charges.
Shawn Heffernan, 42, of San Diego was arrested at his residence after an investigation by the San Diego Regional Fraud Task Force revealed he allegedly defrauded five senior victims out of more than $1.1 million promising investment returns.
Instead, he spent the victims' money on his own personal expenses including jewelry, rental properties and a Maserati, according to investigators.
Three of Heffernan's victims were seniors.
"Heffernan's alleged crimes are reprehensible," said Insurance Commissioner Dave Jones, in a statement.
"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," added Jones.
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.
This 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 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.
"This defendant took advantage of some of the most vulnerable in our community, stealing their money and leaving them high and dry for his own personal gain," said San Diego District Attorney Summer Stephan.
"This prosecution is a great example of our office's commitment to fighting financial elder abuse and helping seniors know how to protect themselves against it," continued Stephan.
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.
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.
Investigators are concerned Heffernan may have more victims and are urging anyone who did business with him, and believes he may have defrauded them, to contact the California Department of Insurance at (858) 693-7100.