Agent sentenced in $590,000 fraudulent life insurance and investment scheme
- December 11, 2019
ORANGE COUNTY, CA — Joseph Ramiro Garcia, 37, formerly of Brea, pleaded guilty yesterday to multiple felony counts of grand theft, insurance fraud, and elder abuse after submitting fraudulent life insurance applications to collect advance commissions and embezzling over $590,000 from 18 different victims.
Garcia was sentenced to six years in state prison and was ordered to pay $459,721 in restitution to his victims, many of which were present in court and gave statements regarding the impact of Garcia’s crimes on their lives.
“Garcia used his position as a financial advisor to take advantage of his clients’ trust and steal their hard-earned money that they depended on to secure their financial futures,” said Insurance Commissioner Ricardo Lara. “My department is committed to investigating unscrupulous agents like Mr. Garcia and making sure they are brought to justice and California’s consumers are protected.”
After receiving a complaint from Transamerica Premier Life Insurance Company, the California Department of Insurance Investigation Division uncovered Garcia’s far-reaching fraud and embezzlement scheme.
Garcia submitted seven fraudulent life insurance applications to the insurance company between December 2014 and January 2015, which caused the company to issue over $50,000 in advanced commissions to the managing general agent, World Financial Group. Garcia received approximately $20,382 of these funds. All the life insurance applications contained the same banking information for premium payment, resulting in unauthorized attempted deductions from an unrelated insured’s bank account. The applications also contained information pertaining to the proposed applicants’ personal identifying information, including Social Security numbers, contact information, and Driver’s Licenses numbers which were found to be bogus.
After executing multiple bank search warrants, department investigators became aware of victims whose relationship with Garcia began when he prepared their income taxes. After gaining their trust, Garcia convinced them to rollover their retirement accounts into another account he controlled through two of his companies, Building Bridges Financial Firm LLC and VOS Financial LLC.
From February 2014 to February 2018, Garcia represented himself as a financial advisor and embezzled roughly $598,906 from 18 different victims, who were unaware their funds were not applied as intended. The majority of the stolen funds were from the victims’ IRA or 401(k) retirement accounts which were never properly rolled over to another independent financial institution. A small portion of the stolen funds were miscellaneous personal checks Garcia negotiated. One victim’s annuity account was systematically liquidated without her knowledge. As a result of the unknown withdrawal of retirement funds, some victims are also facing IRS tax penalties for the early withdrawal of funds and the failure to report income due to Garcia’s actions. The majority of the victims had a close relationship with Garcia and three of the victims were 65 or older at the time of the theft.
The investigation determined the majority of stolen funds were deposited into business bank accounts controlled by Garcia and used instead for personal expenses, such as designer clothing, Disneyland season passes, restaurants, and travel. When the embezzlement was discovered, Garcia refunded monies to some of his victims and belatedly set up financial investments for others to cover his activities.
Garcia was arrested in Anaheim on September 19, 2019, and was booked in to the Orange County Jail. Bail was set at $600,000, however; Garcia did not post bail and has remained in custody. This case was prosecuted by the Orange County District Attorney’s Office under the Life and Annuity Consumer Protection Program.
Garcia is no longer licensed as an insurance agent.