SAN DIEGO–District Attorney Summer Stephan has filed of multiple felony grand theft and elder fraud charges against licensed California insurance agent.
Shawn Heffernan, 42, is charged with defrauding five victims out of more than $1.1 million by soliciting investment funds, then spending those investment funds on his own personal expenses including jewelry, a Maserati, and three rental properties. Three of his victims were seniors at the time they were defrauded by Heffernan. The District Attorney’s Office is seeking additional victims who were targeted by the defendant.
“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 DA 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.”
Heffernan’s fraudulent activities followed a familiar pattern. Initially, as a licensed insurance agent, Heffernan would sell annuity policies issued by legitimate insurance companies. Before the annuity policies expired, he would often convince clients to surrender the existing policies and purchase new annuity policies. This activity, known as ‘churning,’ would result in significant commissions for Heffernan and very substantial surrender penalties for clients. In one case, investigators identified more than $490,000 in early surrender fees and $280,000 in additional commissions collected by the defendant.
Heffernan also convinced victims to cash out their annuity policies, or invest additional funds, into vaguely defined investments directly with him. Heffernan provided few details and little or no documentation to victims. He would deposit the money directly into his own bank account and spend the clients’ money on his own personal living expenses. If a client requested to withdraw money from their ‘investment,’ Heffernan would withdraw money he solicited from later investors to satisfy the earlier investors. To date, more than $1.1 million has been identified as having been solicited from victims and spent on Heffernan’s own personal living expenses.
The eight count criminal complaint alleges five felony counts of grand theft and three felony counts of elder fraud. The complaint also alleges an aggravated white collar crime enhancement. Heffernan was arraigned Friday in Superior Court. If convicted of all charges, Heffernan faces a maximum sentence of 14 years and 4 months in state prison.
