Insurance agents Robert Andrew Lotter and Charles Albert Major have been charged with multiple counts of securities fraud violations with aggravated white collar and financial elder abuse enhancements after allegedly defrauding California school system employees with high-risk investments.
According to an announcement by the California Department of Insurance, Lotter owned and operated an insurance agency, R.A. Lotter Insurance Marketing, Inc., and Major is a licensed insurance agent. They contacted clients of the insurance agency and used various schemes to fraudulently obtain victims’ private financial information in order to identify potential investors for Lotter’s high-risk investments including leading some victims to believe Lotter’s insurance agency was affiliated with the California State Teacher’s Retirement System (CalSTRS).
Lotter also owns The TDS Group, a 403(b) plan administrator for school districts throughout California. Some TDS Group clients were victimized after they were contacted by TDS Group representatives, who are also insurance agents for R.A. Lotter Insurance operating under doing business as TDS Benefits & Insurance Services.
The 23 victims identified by the California Department of Insurance were solicited and sold stock certificates in Lotter’s companies, eAgency, Inc. and Mymobilewatchdog, Inc. School system employees who did not have enough liquid assets to invest were encouraged by Lotter and Major to rollover money from their retirement accounts into self-directed individual retirement accounts (IRAs), which were used to invest in Lotter’s companies. And, at least one educator was convinced to withdraw money from their pension to invest in Lotter’s companies.
Both eAgency, Inc. and Mymobilewatchdog, Inc., had poor financial statuses including unpaid financial obligations to prior investors, according to the announcement. Lotter and Major did not make their clients aware of the poor financial statuses of the companies and they did not notify victims when the alleged lucrative partnerships fell through. The California Department of Insurance says the 23 victims lost more than $3,036,300.
The agency says the charges are in addition to charges made in November and in May. On November 24, 2020, Lotter and Major were arrested on similar charges of securities fraud and burglary after allegedly defrauding more than 20 victims out of over $4 million. On May 17, the California Department of Insurance announced additional charges were filed.
Following announcements of the arrests and charges, additional consumers contacted the agency and identified themselves as victims who also purchased stock in Lotter’s companies.