News: 2010 Press Release

Insurance Commissioner Poizner today announced that a Clayton man surrendered for allegedly operating a Ponzi scheme and defrauding unsuspecting investors out of $850,000 dollars.

"No matter how complex or sophisticated you think your scam may be, if you are defrauding consumers, we will track you down and we will help bring you to justice," said Commissioner Poizner.

Victor L. Weber, 55, surrendered to authorities on June 29. He faces multiple felony charges including grand theft by embezzlement and unlawful selling of a security.

A joint investigation conducted by the California Department of Insurance, the Alameda County District Attorney's Office and the California Department of Corporations revealed that Weber was allegedly operating a classic "Ponzi" scheme between December 2006 and March 2009. A Ponzi scheme generally involves enticing individuals to invest money with the promise of an unusually high rate of return. The suspect then converts the money to his own use, and no actual investments are made. Typically, some early investors are paid off with the funds from later investors. A Ponzi investment is destined to ultimately fail, as a suspect cannot bring in enough new investors to pay off the returns he owes earlier participants.

Weber did business as California Covered Risk Insurance and Financial Services, GEM Funding LLC, Grantor Estates Capital, Inc. and Wings of a Dream Foundation. It is alleged that he used the various businesses to fraudulently solicit investment funds to keep up with his Ponzi scheme.

Between December 2006 and March 2009, Weber allegedly solicited five investors to pay the life insurance premiums for a third party also known as a STOLI (Stranger Owned Life Insurance). Weber solicited $850,000 from five victims that was to be submitted to an insurance company for the payment of life insurance premiums for an unknown party. Instead, he allegedly diverted the funds for his personal use.

The Alameda County District Attorney's Office is prosecuting this case. If any person feels that he or she has been a victim of Weber's alleged scheme, contact the Department of Insurance at 707-751-2005.

Commissioner Poizner oversees sixteen CDI Enforcement Branch regional offices throughout the state. Nearly 2,800 insurance fraud-related arrests have been made by CDI since Commissioner Poizner took office in 2007 - more arrests than have been made during any other three year period, under any previous insurance commissioner.