Southern California Couple and Mother Arrested in Alleged Ponzi Scheme

October 28, 2011

A Southern California couple and their mother were arrested and have been charged with violating multiple sections of the state’s penal code and corporations code, it was announced Thursday.

Arrested were Anthony Trae Carlson, 42, Mariah Waterfall O’Brien, 40, and Arvina Joyce Carlson, 68.

“This family conspired to rip off honest investors,” Insurance Commissioner Dave Jones said in a statement announcing the arrests. “Thankfully, they were apprehended before defrauding additional victims.”

Carlson was charged with 40 felony counts, his wife O’Brien and mother Arvina Carlson were each charged with 23 felony counts. All three were charged with violating Penal Code section 487 (a), grand theft, violating corporations code sections 25110/25540 (a), necessity of qualification of security or transaction, violating sections 25401/25540 (b), sale or purchase of securities by means of written or oral communications containing false statements or omissions and also violating section 25541, use of a device, scheme or artifice to defraud.

Bail for Carlson has been set at $2.5 million dollars. Bail for both O’Brien and Arvina Carlson has been set at $1.9 million dollars. If convicted on all counts, Carlson faces a maximum sentence of 27 years, 8 months in state prison while both Arvina Carlson and O’Brien face a maximum sentence of 21 years in state prison.

According to California Department of Insurance investigators, between February 2005 and December 2008, all three suspects participated in an elaborate Ponzi scheme to defraud victims out of their investments.

Each suspect represented to the victims that they either owned or had invested in an insurance company involved in the bail industry which they called State Bonding California. The investigation revealed that the suspects made several misrepresentations or omissions that the company conducted business in over 44 states and produced over one billion dollars in annual revenue, according to investigators.

At least one suspect used fraudulent multimillion dollar State Bonding California dividend checks to persuade victims to invest in the bogus company. Investments were offered to victims in the form of the sale of “membership interests” in State Bonding California. The investments were supposedly guaranteed with returns ranging between 19 to 21 percent.

The suspects collected at least $2.5 million from three different couples and one individual, according to investigators.

State Bonding California was never licensed to sell insurance by CDI nor was it licensed to offer securities by the California Department of Corporations. The investigators say the investigation revealed that the only address associated with the company was a post office box located in Hollywood. In addition, none of the defendants were licensed to offer securities in the State of California. Investigators later determined that some of the monies collected from the victims were used to fund a lavish Hollywood lifestyle being lived by Carlson and his wife, O’Brien in the hills of Los Feliz, Caif.

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