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Prosecutors in California have accused Shawn Heffernan, a retirement planner and insurance agent, of persuading five older clients to surrender annuities and replace the contracts with new annuities from different insurance companies.

Heffernan, 42, was arraigned last week on multiple felony grand theft and elder fraud charges in connection with the annuity replacement allegations, according to officials at the California Department of Insurance.

(Related: Former Oklahoma Agent Gets Prison for Annuities Fraud)

The San Diego Regional Fraud Task Force, which conducted the investigation, found that one client’s annuity replacement led to $490,000 in early surrender fees for the client and $280,000 in additional commission payments to the defendant, according to California department officials.

Investigators found that, in some cases, Heffernan deposited clients’ money into a personal bank account, spent the money on living expenses, and used money from new clients to satisfy earlier clients who asked to withdraw money from their accounts, California department officials say.

The criminal complaint includes five felony counts of grand theft, three felony counts of elder fraud, and an aggravated white-collar crime enhancement. If convicted of all charges, Heffernan faces a maximum sentence of 14 years in state prison.

Heffernan could not immediately be reached for comment.

— Read Miscarriage of Justice? on ThinkAdvisor.