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The Daily Wildcat

The Daily Wildcat

 

    Clayton man sentenced in Ponzi scheme

     

    OAKLAND – A licensed insurance agent from Clayton has been sentenced to 44 months in prison for his part in a Ponzi scheme, the Alameda County District Attorney announced Wednesday.

    Victor Weber, 55, was sentenced April 22 and must also pay $800,000 restitution.

    Weber pleaded guilty Dec. 28 to three felonies — grand theft by embezzlement, unlawful offering or selling of a security and theft of fiduciary funds, according to prosecutors. He did business as California Covered Risk Insurance and Financial Services, GEM Funding and Grantor Estates Capital.

    Between December 2006 and March 2009, he solicited six victims into investing $800,000 for the payment of life insurance premiums for unnamed third parties. In such a policy, called a STOLI (stranger owned life insurance), an investor buys life insurance from a policyholder who no longer needs the death benefit, such as a parent who outlives all his or her children. The investor purchases the policy, takes over the premium payments and becomes the ultimate beneficiary.

    Such investments are not illegal in California unless connected with some other fraud, prosecutors said. In this case, Weber told his victims he was going to use their investment money to finance STOLI-type investments. Instead, he used the money for personal expenses, business and personal property. Weber used some of the new investor money to pay off earlier investors. None of the money was ever used to buy

    life insurance.

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