Newport Beach insurance agent pleads not guilty in $4-million securities fraud scheme
A 63-year-old Newport Beach insurance executive pleaded not guilty to charges in what state authorities said was a $4-million securities fraud scheme that affected more than 20 victims.
Robert Andrew Lotter denied more than 20 felony charges filed against him, which include assertions of untrue statements or omission in connection with purchase or sale and use of a device, scheme or artifice to defraud with sentencing enhancements for aggravated white-collar crime, according to court records. Jail records state Lotter was arrested on Nov. 24 with his co-defendant, Charles Albert Major, 71.
Court records show charges dating incidents as far back as 2005.
State officials said in a statement issued the day after the arrests that an investigation by the California Department of Insurance alleges that Lotter and Major fraudulently solicited and sold victims more than $4 million in stock certificates in both of Lotter’s companies — eAgency, Inc. and Mymobilewatchdog, Inc.
Officials said that Lotter owns R.A. Lotter Insurance Marketing, Inc. and that Major, a resident of Irvine, was a licensed insurance agent.
Jessey Cordero, a Fountain Valley resident, was presented with a Crime-Biters award by Fountain Valley Police Chief Matt Sheppard.
Investigators said the two contacted clients of R.A. Lotter Insurance Marketing and used various schemes to fraudulently obtain private financial information in order to identify potential investors for Lotter’s high-risk investments.
Officials said the two led several victims to believe that the company was authorized or affiliated with the California State Teachers’ Retirement System, which provides retirement pension advice to state public school educators. Some did not discover that it was not authorized or affiliated until after they’d invested substantial funds in Lotter’s companies, according to officials.
“Even though these insurance agents had a fiduciary responsibility to represent their clients’ best interest, they allegedly put greed above their clients’ needs,” Insurance Commissioner Ricardo Lara said in a statement. “Their arrest shows the department of insurance will persist in investigating and stopping insurance professionals who put their clients at financial risk.”
State officials said Lotter and Major continued to do this between 2003 and 2018, claiming that profits from the two companies were “just around the corner” and that they had partnerships with large internet companies and prominent mobile carriers.
“They showed clients newspaper articles and televised interviews featuring Lotter to cement victims’ confidence in their investments and mitigate concerns victims had about their investments and the continued delays of their investment returns,” officials said, adding that eAgency, Inc. and Mymobilewatchdog, Inc. had poor financial statuses that included unpaid financial obligations to prior investors.
Mark Allen Korando, 69, was arrested Monday on suspicion of assaulting two girls and, given his ties to the church and local community, Costa Mesa detectives believe there could be more victims.
Officials said Lotter and Major did not make their clients aware of the statuses of the companies. Lotter and Major also did not notify victims when the alleged lucrative partnerships fell through and led victims to believe that their investments were still viable, officials said.
Lotter is due to appear in court on Dec. 17 for a preliminary hearing at the Central Justice Center in Santa Ana. Major’s arraignment in the jail courtroom was continued to Dec. 16.
Both remain in custody as of Tuesday. Lotter is being held on a bail of $4 million and Major is being held on a bail of $2 million, according to the Orange County district attorney’s office.
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