SANTA ANA — A 63-year-old Orange County insurance executive pleaded not guilty Monday to charges in an alleged multi-million dollar investment fraud while another co-defendant awaits arraignment this month.
Robert Andrew Lotter of Newport Beach denied 20 felony charges including making an untrue statement or omission in connection with the offer or sale of a security, use of a device and scheme or artifice to defraud with sentencing enhancement allegations of aggravated white collar crime, according to court records.
Co-defendant Charles Albert Major, 71, of Irvine, an insurance agent who worked for Lotter, was charged with 27 felonies including making an untrue statement or omission in connection with the purchase or sale of a security and burglary with sentencing enhancement allegations for aggravated white collar crime, according to court records.
The two, who were arrested Nov. 24, were being held without bail, according to jail records.
In court papers, state Department of Insurance investigator Braelyn Velasco said Lotter “fraudulently sold securities to 20 victims by means of omission, misrepresentation, and through the use of a device, scheme, or artifice, Lotter’s victims lost $4,087,811.04.”
From May 2003 to May 2018, Lotter “sold investments in his companies’ eAgency Inc. and Mymobilewatchdog Inc. by the use of misleading marketing materials and tactics that led victims to believe Lotter’s insurance agency was affiliated with the California State Teachers’ Retirement System, a state agency that provides retirement pension benefits to California public school educators,” according to Velasco.
Lotter created My Mobile Watchdog, a Newport Beach-based company that helps parents use the app to keep track of web activity on their children’s cellphone.
“Victims responded to the misleading materials with the believe they were requesting a retirement analysis from (the state retirement system),” Velasco alleged.
Accredited investors were then solicited to invest in the defendant’s companies, Velasco said.
Lotter “inappropriate used his agency to access customers’ private financial information to determine if the customer was accredited, in order to solicit the customers’ investments” in the defendants’ companies, Velasco alleged.
Lotter also dangled “unrealistic and inflated financial projects of his companies” to potential investors, Velasco alleged.
Lotter also “failed to properly disclose to all victims” that investments in his companies were “high risk,” Velasco alleged.
“At least 10 victims stated there were no such discussions of the risk involved, or that such discussions did not identify the investment as high-risk,” Velasco alleged. “Some victims were told there was no chance they would lose any of their investment.”
Velasco further alleged that Lotter and his “companies continued to lull victims throughout the years into believing eAgency Inc and/or Mymobilewatchdog Inc. was making significant progress and investors would see substantial returns soon. Nearly every victim stated they were told investors would see returns within one to two years. The same message was given to victims from the early 2000s until 2018.”
Major was scheduled to be arraigned Dec. 16 in the jail courtroom in Santa Ana.
Source: Orange County Register