Financial Scam Targeting Elderly

State of California, May 15, 2007

Insurance Commissioner Steve Poizner announced today the sentencing of three senior citizens who preyed on the elderly by selling them financial products that were unregistered and unqualified for sale in California. All three pleaded "No Contest" following an investigation by the California Department of Insurance's (CDI), Investigation Division, Valencia Regional Office landed them in court.

"It seems that fraud knows no age limit," said Insurance Commissioner Steve Poizner. "But it is particularly disturbing when senior citizens seek to take advantage of other, more vulnerable elderly citizens."

On January 18, 2007, Lawrence John Deovlet also known as Lawrence John Hartunian, 64, of Westlake Village pleaded "No Contest" to one count of Corporations Code 25210, Unlicensed Broker-Dealer. Deovlet was ordered to pay $500,000.00 in restitution to eleven victims, commit no further violations of the Corporations Code, serve one year unsupervised probation, pay a $200 restitution fine and a $20 court fee.

Also pleading No Contest, were Robert E. Ryan, 72 and Dessie Ryan, 70, of San Juan Capistrano. The Ryans operated Consolidated Capital, Inc. and acted as upline brokers for Deovlet. In February, 2006, former life agent Bassem "Bob" Btadini who was recruited by Deovlet, pled "No Contest" to similar charges. The Ryans were ordered to pay restitution of $20,000.00 immediately, and pay $500,000.00. The Ryans were each placed on five years formal probation, ordered to commit no further violations of the Corporations Code, perform 100 hours of Community Service, pay a restitution fine of $200 and a court fee of $20. This case was prosecuted by the Los Angeles County District Attorney's Office, Major Fraud Division.

This case involves the sale of nine-month promissory notes to elderly consumers. The promissory notes were not qualified or registered for sale in the state of California. The life insurance agent originally sold the elderly consumer a living trust, then persuaded the consumer to purchase a nine-month promissory note. The notes were sold as guaranteed investments, issued by several out of state "start up companies" looking for capital to maintain and expand their businesses. All of the companies defaulted on the notes and few investors ever saw their money again. Deovlet took in $2.2 million dollars from 34 senior citizens in Los Angeles and Ventura counties between 1997 and 1999.