A San Diego insurance agent who defrauded senior citizens and others out of nearly $1.5 million by soliciting investment funds and spending that money on personal items such as jewelry, a Maserati and a lavish wedding was sentenced Wednesday to nine years in state prison.
Shawn Heffernan, 43, pleaded guilty last month to 29 counts, including elder fraud and grand theft.
Eight of Heffernan’s 15 victims were senior citizens and one was a dependent adult, San Diego County District Attorney Summer Stephan said.
“Stealing money from investors, and defrauding them out of their hard- earned savings, especially when some of the victims are senior citizens, is disgraceful and will not be tolerated,” Stephan said. “Our Economic Crimes team brought a measure of justice to the victims by holding the defendant accountable for his crimes.”
According to investigators, Heffernan’s fraudulent activities followed a familiar pattern. Initially, as a licensed insurance agent, he would sell annuity policies issued by legitimate insurance companies. Before the annuity policies expired, Heffernan would often persuade clients to surrender the existing policies and purchase new ones, prosecutors said.
The activity, known as “churning,” would result in significant commissions for Heffernan and very substantial surrender penalties for clients, according to prosecutors. In one case involving an elderly victim, investigators identified more than $490,000 in early surrender fees and $280,000 in additional commissions collected by Heffernan.
The defendant also persuaded victims to cash out their annuity policies or invest additional funds into vaguely defined investments directly with him, prosecutors said.
Investigators said Heffernan provided few details and little or no documentation to his victims. He would deposit investment money directly into his own bank account and spend the clients’ money on his own living expenses, according to investigators.
If a client requested to withdraw money from their “investment,” Heffernan would withdraw money he solicited from later investors to satisfy the earlier investors, according to prosecutors.
—City News Service
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