Ex-CEO of TLC America Sentenced in Scheme

Ernest Frank Cossey, former chief executive of investment firm TLC America Inc., was sentenced to nearly five years in prison for his role in a $146-million scheme that targeted the elderly.

Cossey had pleaded guilty in March to income tax evasion and conspiracy to commit mail fraud. He also was ordered to return more than $60 million to his investors.

TLC America operated as a Ponzi-type scheme, paying early investors with money from later investments, from 1997 to 2000, when federal authorities took over the company, prosecutors said.

TLC raised money from 1,850 investors, promising annual returns of 12% or more through a distressed real estate investment program. The average age of TLC’s investors was 67, prosecutors said.

Cossey, 56, spent more than $7 million on racehorses and greyhound race dogs. He also used investors’ money to buy and furnish a $1.46-million home and donated $1.5 million to refurbish the football stadium at his son’s high school in Diamond Bar.

Cossey, who moved TLC’s operations from San Diego to Brea in 1998, previously had agreed to pay $10.9 million as well as to forfeit his home, valued at $1 million, and personal furnishings.

TLC co-founder Eunan Aeria of San Diego pleaded guilty last year for his role in the scam.