The CEO of an Irvine-based financial services and insurance company was arrested on federal charges of defrauding about a dozen victims who thought their money was being invested in a certificate of deposit at a major bank.
The scam allegedly runs out of Five Star Financial Services of America, LLC targeted the retirement accounts and savings of elderly investors and other vulnerable victims, according to a federal criminal complaint that notes one 70-year-old victim lost nearly all of his $1.6 million investment with Five Star.
This morning, FBI and IRS special agents arrested Memet Fatih Biyikoglu, 50, of Palm Desert, who was Five Star’s chief executive officer and was known to some victims as “John B.” Biyikoglu is expected to make his initial court appearance in United States District Court in Santa Ana.
Anna Marie Holt, 58, of Fountain Valley, who was the president and chief operating officer of Five Star, is expected to self-surrender to authorities this afternoon. Holt also is expected to make her first court appearance this afternoon in federal court in Santa Ana.
A third defendant named in the criminal complaint – Ida Shaghoian, 38, of Palm Desert, a sales agent with Five Star and Biyikoglu’s ex-wife – is currently being sought by federal agents.
According to the affidavit in support of the criminal complaint, Biyikoglu, Shaghoian and Holt solicited investors to put retirement funds, savings, and other assets in a certificate of deposit held at JP Morgan Chase Bank with promises that the investments were safe and would generate large returns.
In reality, the Chase bank CD did not exist, and the defendants used the victims’ money for their own personal use, which included paying for real estate, jewelry, and a Ferrari, the complaint alleges. As part of the scheme, victims were given bogus Chase Bank statements to make it appear their money had been legitimately invested.
To date, the investigation has identified 11 victims who transferred at least $4,088,338 to Five Star in 2014 and 2015, according to the complaint. Several of the victims lost their entire retirement savings.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The charge of conspiracy to commit wire fraud carries a statutory maximum sentence of 20 years in federal prison.