Even in Southern California, where bogus annuity schemes run rampant, Steven Edward Branstetter’s alleged crimes were brazen.
Branstetter, a former insurance agent from Culver City, Calif., pleaded not guilty to theft and embezzlement in connection with a Ponzi scheme involving at least 18 victims. He is charged with the theft of $2.25 million in insurance premiums over a nine-year period, authorities said. Many of his alleged victims are senior citizens, authorities added.
California Insurance Commissioner Dave Jones said in a news release that Branstetter’s alleged crimes were “one of the worst cases of senior financial abuse we have seen in a while.”
Branstetter, whose insurance licenses expired in 2013, targeted his victims by convincing them to cash in their legitimate policies to invest in bogus life and disability policies and annuity contracts that he prepared through his businesses LifeCo. and AIIA Group.
Not only did he collect the premium to line is own pockets, the new contracts and policies were fake and had no value, investigators said.
“He ruthlessly targeted vulnerable seniors, taking their money, making big promises and leaving them with worthless pieces of paper and no coverage,” Jones said.
Branstetter operated the alleged scheme from 2005 to 2014, well after his license had expired. In some cases, he used incoming premium from some victims to pay other policyholders, officials said.
He pleaded not guilty to all the charges on Sept. 26.
The 60-year-old former agent was arrested Sept. 23 by California Department of Insurance investigators and booked into the Men’s Central Jail in downtown Los Angeles, according to the Los Angeles County Sheriff’s Department.
Bail was set at $715,000. If Branstetter wants to go free, he must post bail with money from legitimate sources, authorities said. He is scheduled to appear in court Oct. 31.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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