View this article online: https://www.insurancejournal.com/news/west/2021/09/14/631672.htm
Additional felony charges have been filed against Robert Andrew Lotter, 64, of Newport Beach, Calif., and Charles Albert Major, 72, of Irvine, who were arrested in November after allegedly defrauding their clients with high-risk investments.
The additional charges include multiple counts of securities fraud violations with aggravated white collar and financial elder abuse enhancements after allegedly defrauding an additional 23 victims. The collective loss from Lotter’s and Major’s alleged fraud is more than $10 million to 64 victims.
On Nov. 24, 2020, Lotter and Major were arrested on similar charges of securities fraud and burglary after allegedly defrauding more than 20 victims out of over $4 million. On May 17, 2021, the California Department of Insurance announced additional charges were filed.
With the new charges announced this week, Lotter is charged with a total of 64 felony securities fraud violations and Major is charged with 29 felony securities fraud violations and six charges of residential burglary.
An investigation by the CDI alleges that Lotter and Major fraudulently solicited and sold victims stock certificates in Lotter’s companies, eAgency Inc. and Mymobilewatchdog Inc. Following announcements of the arrests and charges, additional consumers contacted the Department and identified themselves as victims who also purchased stock in Lotter’s companies.
Lotter owned and operated an insurance agency, R.A. Lotter Insurance Marketing, Inc., and Major is a licensed insurance agent. Lotter and Major contacted clients of R.A. Lotter Insurance Marketing and used various schemes to fraudulently obtain victims’ private financial information in order to identify potential investors for Lotter’s high-risk investments including leading some victims to believe Lotter’s insurance agency was affiliated with the California State Teacher’s Retirement System.
Lotter also owns The TDS Group, a 403(b) plan administrator for school districts throughout California. Some TDS Group clients were victimized after they were contacted by TDS Group representatives, who are also insurance agents for R.A. Lotter Insurance operating under doing business as TDS Benefits & Insurance Services.
A continued investigation reportedly identified an additional 23 victims who lost more than $3 million and were solicited in the same manner and using similar tactics as discovered during the previous investigation. These include Lotter’s and Major’s failure to disclose pertinent information that investors should have known prior to investing, such as disclosures that eAgency and MyMobileWatchdog were high-risk investments.
Victims who did not have enough liquid assets to invest were reportedly encouraged by Lotter and Major to withdraw money from their 401(k)s and Individual Retirement Accounts (IRAs) and rollover their retirement accounts into self-directed IRAs, which were used to invest in Lotter’s companies. At least one educator was convinced to withdraw money from their pension to invest in Lotter’s companies.
Both eAgency Inc. and Mymobilewatchdog Inc., had poor financial statuses including unpaid financial obligations to prior investors. Lotter and Major did not make their clients aware of the poor financial statuses of the companies and they did not notify victims when the alleged lucrative partnerships fell through. Victims were led to believe their investments in eAgency, Inc. and Mymobilewatchdog, Inc. were still viable.
Lotter and Major are currently out on bail. The case is being prosecuted by the Major Fraud Unit of the Orange County District Attorney’s Office.