BRIEF: State says San Clemente man bilked seniors of $1.6 million in investment fraud scheme

March 13--The California Department of Insurance on Monday said it arrested Mark Malatesta, now a former insurance agent, on 16 felony counts tied to what the agency called a $1.6 million fraud scheme that targeted Southern California senior citizens.

Malatesta faces seven counts of insurance fraud, six counts of residential burglary, two counts of financial elder abuse and one count of grand theft, adding up to $1,616,897 in damages from seniors he worked with, the agency said.

Malatesta, 55, of San Clemente, was a licensed insurance agent until his scheme was unraveled and his license was suspended, the department said. An investigation found that Malatesta would convince targets to terminate their investments, costing them a total of $45,000 in surrender penalties. He would then sell them new investments that their age made them unqualified for, the department alleged.

All of the allegedly fraudulent investments were shut down when false information Malatesta provided was caught by insurers, the agency alleged. The money Malatesta scammed his victims for was returned to them, the department said.

Malatesta's case is being prosecuted by the Orange County District Attorney's Office.

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