OKC insurance broker sued for fraud, unregistered sales
An Oklahoma City insurance broker is under legal scrutiny, accused of defrauding and “preying” upon senior citizens.
The Oklahoma Department of Securities filed a lawsuit Tuesday accusing Jesse Munoz Garcia Sr. of wrongfully accepting money from investors and using the funds for personal expenses. He also reportedly omitted facts and gave untrue statements to clients.
Administrator Irving L. Faught said the department is aware of two elderly investors affected in Oklahoma. One investor in his late 70s made multiple payments totaling to $185,000.
“We find them to be a particularly vulnerable class of investors,” Faught said. “They are willing to trust. They are willing accept at face value what someone tells them, and I think that makes them a particular target for unscrupulous con men.”
Garcia couldn’t be reached for comment Wednesday.
The department requested Garcia pay restitution to the two investors. It also filed for an injunction preventing him from issuing any further investment deals and selling securities in the state.
Garcia has been a licensed insurance broker since 1994. However, he wasn’t registered as an investment adviser or broker-dealer.
Despite failing to register his securities, he offered “self-contrived” investment agreements to two of his existing insurance clients, according to the lawsuit.
The investment agreements offered a fixed rate of 10 percent interest for a year and monthly interest payments. Garcia promised to repay the principal investment and all remaining accrued interest at the end of 12 months, the department reported.
Nothing in the agreements disclosed how investor money would be used or explained the risk factors associated with the investments, according to the lawsuit.
The department alleged Garcia placed at least some investor dollars in a trading account and then “decimated” the funds with personal withdrawals and failed securities trades. Faught said officials have examined Garcia’s bank accounts and found evidence of mishandling of funds.