A 77-year-old Laguna Niguel-based insurance salesman pleaded guilty and was immediately sentenced to 10 years in prison for operating an $11.3 million Ponzi scheme that mostly targeted senior citizens.
Joseph Francis Bartholomew, formerly of Lake Forest, accepted a plea deal from Orange County Superior Court Judge Robert Fitzgerald, his attorney Al Stokke said. Bartholomew was given credit for two years already served.
Co-defendant Wendy King-Jackson, 56, of Laguna Niguel, who was Bartholomew’s office manager, also pleaded guilty in the Monday proceedings for her part in defrauding two victims and is expected to be sentenced to a year in jail Feb. 2.
Bartholomew bilked 27 victims, most of whom were senior citizens, prosecutors said. Bartholomew, who owned MBP Insurance Services Inc., operated the scheme for 10 years, according to prosecutors.
The scheme involved selling life insurance policies on third parties, with investors paying the premiums for the first year and receiving 15 to 24 percent annual returns, prosecutors said. The defendant, as a broker or agent, was supposed to receive 130 percent of the first year’s premium, prosecutors said.
He did make some payments to some investors, but eventually the debts out-paced the cash flow, leading to the Ponzi scheme, prosecutors said.
Stokke said Bartholomew “went through a long career with many successes prior to this point in time. But certainly something went wrong, so he’s paying the penalty on that and hopefully he’ll be able to come through this and live out the balance of his life in a productive way.”
–City News Service