INSURANCE AGENT TO BE ARRAIGNED FOR $1.6 MILLION ANNUITY FRAUD SCHEME TARGETING ELDERLY CALIFORNIANS

Case # 18NF0615

Date: March 13, 2018

INSURANCE AGENT TO BE ARRAIGNED FOR $1.6 MILLION ANNUITY FRAUD SCHEME TARGETING ELDERLY CALIFORNIANS

SANTA ANA, Calif. – A licensed insurance agent is scheduled to be arraigned tomorrow for a $1.6 million annuity fraud scheme targeting elderly Southern California residents.

 Circumstances of the Case

• At the time of the crime, Malatesta was a licensed insurance agent with Heritage Financial Insurance Services and was appointed by EquiTrust Life Insurance Company to sell their products.
• Between 2014 and 2016, the defendant is accused of exploiting at least six elderly consumers by falsifying their age on annuity applications and obtaining more than $135,000 in illegal commissions.
• The victims were over 75 years old, the maximum age for these annuities, and Malatesta is accused of modifying their date of birth so they would appear young enough to quality.
• Malatesta is accused of convincing his senior victims to terminate a total of $1.6 million in existing investments, causing them to lose a total of $45,000 in surrender penalties before the funds matured.
• The defendant is accused of falsely promising the victims large bonuses to offset their losses.
• Malatesta is further accused of selling the victims new annuities for which they did not qualify due to their advanced age.
• Insurers canceled the fraudulent investments once they discovered Malatesta provided false information, subsequently losing nearly $1.8 million in refunds and interest paid to the victims.
• This case was investigated by the California Department of Insurance (CDI), and CDI investigators arrested Malatesta on March 12, 2018.

Resources from CDI

Be Aware Of Deceptive Sales Practices When Purchasing Annuities

What Seniors Need to Know About Annuities

Prosecutor: Senior Deputy District Attorney Marc Labreche, Major Fraud Unit