Southern California Agent Sentenced For Ponzi Scheme

April 15, 2014

Michael Zuno Zuniga, 43, of Fullerton, was sentenced to five years in Los Angeles County Jail and ordered to pay $1.2 million in restitution for his participation in a Ponzi scheme targeting Los Angeles area seniors.

Zuniga was arrested in June 2012, after the Attorney General’s office filed a criminal complaint alleging 57 felony counts against Zuniga. The complaint alleged that Michael Zuniga and his accomplices defrauded several senior citizens, many from the Latino community, of roughly $1.5 million in a highly organized and sophisticated Ponzi scheme.

“The fact that Zuniga used his position as a licensed agent to rip off vulnerable seniors is particularly insulting,” California Insurance Commissioner Dave Jones said in a statement.

According to a joint California Department of Insurance and California Department of Justice investigation, as a licensed agent, Zuniga allegedly owned and conducted business as the Omega Investment Group, an unlicensed entity located in Downey.

The investigation revealed a Ponzi scheme targeting Latinos through solicitation in their homes, in which Zuniga issued more than $1.3 million in fraudulent securities. The 57-count complaint included securities fraud, grand theft, elder abuse, burglary and conspiracy. The joint investigation identified 18 victims throughout Los Angeles County.

Zuniga assisted many of his victims in refinancing their homes in order to invest in his scheme. He fraudulently represented that Omega was a profitable business that for three years bought and sold real estate that was in foreclosure. Omega claimed that these types of investments were so successful they guaranteed a 15 percent secured interest annually to those who invested.

The investigation revealed that Omega had not purchased or sold any property for three years prior to January 2007. A further review of Omega’s bank records revealed that it was never a profitable business and did not secure investments with property or any other assets as promised. In reality, Omega’s owners diverted $663,000 from the $1.5 million collected to purchase real estate for an undisclosed entity known as Homes Brought Current, and then used the fraudulently diverted funds for personal benefit. Additionally, in true Ponzi fashion, payments Omega made to newer investors were from prior investor funds, rather than business profit.

Topics California Agencies Fraud

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