Three Calif. Senior Citizens Sentenced in Financial Scam

Three senior citizens who preyed on the elderly by selling them financial products that were unregistered and unqualified for sale in California have been sentenced, according to the California Department of Insurance. All three pleaded “no contest” following an investigation by CDI’s Investigation Division, Valencia Regional Office.

On Jan. 18, 2007, Lawrence John Deovlet, also known as Lawrence John Hartunian of Westlake Village, Calif., pleaded “no contest” to one count of Corporations Code 25210, Unlicensed Broker-Dealer. Deovlet was ordered to pay $500,000 in restitution to 11 victims, commit no further violations of the Corporations Code, serve one year unsupervised probation, pay a $200 restitution fine and a $20 court fee.

Also pleading no contest, were Robert E. Ryan and Dessie Ryan of San Juan Capistrano, Calif. The Ryans operated Consolidated Capital Inc. and acted as upline brokers for Deovlet. In Feb. 2006, former life agent Bassem “Bob” Btadini, who was recruited by Deovlet, pled “no contest” to similar charges. The Ryans were ordered to pay restitution of $20,000 immediately, and pay $500,000. The Ryans were each placed on five years formal probation, ordered to commit no further violations of the Corporations Code, perform 100 hours of community service, pay a restitution fine of $200 and a court fee of $20. The case was prosecuted by the Los Angeles County District Attorney’s Office, Major Fraud Division.

This case involves the sale of nine-month promissory notes to elderly consumers. The promissory notes were not qualified or registered for sale in the state of California. The life insurance agent originally sold the elderly consumer a living trust, then persuaded the consumer to purchase a nine-month promissory note. The notes were sold as guaranteed investments, issued by several out of state “start up companies” looking for capital to maintain and expand their businesses. All of the companies defaulted on the notes and few investors ever saw their money again. Deovlet took in $2.2 million dollars from 34 senior citizens in Los Angeles and Ventura counties between 1997 and 1999, CDI said.

Source: CDI