William A. Sassman, 42, of Sacramento has plead guilty to 13 felony counts of grand theft in a ponzi scheme that he was arrested for last year, the California Department of Insurance reported. Sassman has been in custody at the Sacramento County Main Jail since his arrest on Nov. 16, 2009. Initially, he was arrested on 100 counts including felony grand theft, burglary charges and one additional count of using a scheme to defraud. He faces 18 years in prison and $4.3 million in restitution.
A joint California Department of Insurance (CDI) and California Department of Justice (DOJ) investigation revealed that more than half of the 35 known victims were senior citizens. The total loss that resulted from Sassman’s five-year Ponzi scheme was $6.3 million. Sassman will be formally sentenced in Sacramento Superior Court on Jan. 7, 2011.
In Feb. 2006, the Department of Corporations issued a “desist and refrain” order to stop Sassman from selling unauthorized securities under various company names. Sassman’s scheme involved the use of various company names, including Formulating Insurance Agency LLC, Formulating Investments, InTex LLC, and Systematic Management Services LLC. Through misrepresentation and deceit, Sassman convinced clients to invest funds into various joint ventures that ultimately failed.
A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. Ponzi schemes require an ever-increasing flow of money from investors to keep the scheme going. In Sassman’s case, most of the money taken in had been used to support a lavish lifestyle, and investors were kept at bay by receiving small payments of money taken from new investors.
Sassman has been a licensed life insurance agent since 1992. Sassman’s insurance license was formally revoked by the Department of Insurance on Feb. 27, 2010.
Was this article valuable?
Here are more articles you may enjoy.