A Culver City man has been arrested on suspicion of operating a Ponzi scheme that bilked people out of more than $2 million through fake annuities and insurance policies, authorities announced Friday.
Steven Edward Branstetter, 60, was booked on 13 felony counts of elder and grand theft and is being held on $715,000 bail. If he wants to be released from jail, he will have to prove the bail money is from a legitimate source.
The California Department of Insurance said Branstetter’s business, LifeCo., offered annuities with healthy, reliable profits and life and disability insurance policies to the elderly, among others. Some of the policies were sold under the name AIIA Group, authorities said.
The alleged scheme operated from 2005 to 2014 and Branstetter created fake account statements and contracts he sent to clients to make his business look legitimate, insurance officials said. In some cases, he used money from some victims to pay others, authorities said.
“These individuals were seniors who were seeking long term investment vehicles to make sure they were secure in their retirements. He took advantage of that and ruthlessly targeted them,” state Insurance Commissioner Dave Jones told the Times in an interview Friday. “We’re going to do everything we can to recover as much as we can from this individual.”
Some of the victims were so convinced of Branstetter’s honesty that they cashed in their other, real annuities and insurance policies so they could invest with him, insurance officials said. Branstetter’s insurance license expired several years ago, they said.
The department said there were at least 18 victims and that Branstetter embezzled more than $2.25 million. Some victims were left penniless, authorities said.
Jones said consumers should verify that their broker has an insurance license in good standing, that the company is licensed to operate in California and that the policy on offer is legal.
Investigators began examining Branstetter’s business after one of his clients became disabled and tried to cash out an insurance policy in 2014, officials said. The person couldn’t collect on the policy and notified regulators.
Authorities said it appeared Branstetter spent most of the millions of dollars he took in from clients. No assets were seized during his arrest Friday, but investigators are still searching, authorities said.