LOS ANGELES (CBS) — Two licensed insurance agents will appear in court Friday on charges they ran a $1.3 million Ponzi scheme targeting Latino investors, many of them senior citizens.
Edwin G. Salazar, 34, of Downey, and Michael Z. Zuniga, 41, of Fullerton, have been arrested on 57 counts of elder abuse, grand theft and securities fraud. The two men, licensed insurance agents, did business as OMEGA Investment Group of Downey between January 2007 through June 2008.
Investigators from the state Department of Justice and Department of Insurance found the two men allegedly issued more than $1.3 million in fraudulent securities to individual investors they befriended through their insurance business.
“These agents conspired to rip off trusting members of their own community,” Insurance Commissioner Dave Jones said in a statement. “Preying on senior citizens for financial gain is deplorable and it will not go unpunished.”
The scheme targeted Latino investors, many of whom were seniors, who were guaranteed a return of 15 percent on investments with the company, which claimed to be buying and selling homes in foreclosure. Officials say the pair’s company never bought and sold foreclosed property with the money and was in fact never a profitable company. The investment funds were instead diverted to other investments and to the personal uses of Salazar and Zuniga, according to state officials, who paid interest to previous investors from capital raised from new ones.
Salazar was arrested in April and is in jail on $176,668 bail. Zuniga was arrested last Friday and was released Tuesday after posting $50,000 bail.