SIMI VALLEY — A network of insurance agents is under investigation for allegedly taking more than $1 million from 200 Southern California senior citizens--including at least five from Simi Valley--as part of a scam involving promissory notes, an official with the state attorney general's office said Friday.
James Root, a deputy attorney general, declined to reveal the names of those under investigation but said they "were part of a common network" that asked seniors in at least five counties to invest in nine-month promissory notes through a variety of companies. Simi Valley seniors lost at least $580,000, Simi Valley Police Sgt. Bob Gardner said.
Agents cold-called seniors and asked to review their living trusts in order to see their assets. They then offered 10% to 15% interest returns on investments in companies over a nine-month period. Some seniors received a few interest payments but none received all interest promised or their principal investment back, Root said.
New England International Surety, the insurance company that the agents promised would cover any losses, is based in Belgium and has not paid any seniors, he said. Most seniors invested their money in 1998 and 1999, Root said.
Organizations investigating the alleged scam include the state Department of Insurance, the state Department of Corporations and the Kern County, Los Angeles County and Ventura County sheriff's departments. The state attorney general's office began coordinating the investigation about two months ago, Root said.
The Simi Valley incidents began last year, Gardner said.
"This kind of crime is everywhere and on the rise," Gardner said. "Con men have found over the years that there are some senior citizens that are a little more gullible and trusting. They just make better victims. It's not true of all of them, but they've found that to be true of a lot of them."
In addition to investigating the agents, the state attorney general's office is looking into the companies involved. At least some of them are known to be actual companies, Root said.
"They had employees, business locations and were doing some form of business," he said.
Attempting to swindle money from the elderly isn't unheard of in Simi Valley. Mayor Bill Davis has been told of seniors getting scammed on everything from life insurance to improved water systems for their homes, he said.
"It really bothers me that they pick on people that are aged. . . . [The con men] take every dime away from them," Davis said. "They have no conscience . . . at all."
Kathryn Medley, senior services coordinator for the Simi Valley Senior Center, knows firsthand. Her parents were nearly swindled out of $75,000 about five years ago in Lancaster when somebody almost persuaded them to change their investments before she found out about it, she said.
"Seniors sometimes are so distracted by some of the other challenges and obstacles in their life [that] when they get a call, sometimes they don't even think twice that this might be a con," Medley said.
Anybody who receives suspicious phone calls regarding investments is encouraged to contact the Simi Valley Police Department at (805) 583-6950.