CA man sentenced after defrauding 86 yr old San Francisco woman out of $140,000

FOR IMMEDIATE RELEASE

January 8, 2010

CONTACT:
ADA Brian Buckelew, DA Harris’ Office, (415) 553-1383
Erica Derryck, DA Harris’ Office, (415) 553-1167

Man Sentenced to Six Years in State Prison for Defrauding
86-Year-Old Woman in Annuity Scam
Prosecution was Part of a DA-led Crackdown on Financial Predators

SAN FRANCISCO – San Francisco District Attorney Kamala D. Harris announced today that John McTaggart, age 46, CTN 2410048, was sentenced today to six years in state prison on a felony charge of first-degree burglary for his role in allegedly stealing $140,000 from an 86-year-old San Francisco woman as part of an annuity scam. The first-degree burglary conviction is considered a “strike” under California’s “three-strikes” law.

The defendant was sentenced today by the Honorable Charles Haines of the San Francisco Superior Court. Before sentencing and as part of the plea agreement, the defendant’s attorney presented the prosecutor with a $50,000 cashier’s check in the victim’s name in partial restitution for her loss. McTaggart is still responsible for repaying the outstanding $90,000 in restitution to the victim.

"Mortgage fraud and investment scams frequently target society’s most vulnerable people," said San Francisco District Attorney Kamala D. Harris. "Elders deserve dignity and respect, not manipulation and abuse. Thanks to the coordinated efforts of the SFDA, the SFPD, the Governor’s Office, the SF Adult Protective Services, the SF Elder Abuse Forensic Center, and the California State Department of Insurance, he will spend the next six years in prison for his selfish, exploitive misdeeds."

According to court documents, in February 2008, McTaggart, a former broker, convinced his elderly victim to sign over $140,000 in monies received through a legitimate reverse mortgage that he had helped the victim secure. Once the victim received the money from the reverse mortgage, McTaggart allegedly convinced her to dedicate a portion of the funds to two separate annuities he would sell her.

An annuity account is a contract between the investor, called the “annuitant,” and an insurance company. The insurance company promises to pay the annuitant a set amount of money, on a periodic basis, for a specified period. The annuity provides a type of retirement-income insurance: the annuitant contributes funds to the annuity in exchange for a guaranteed income stream later in life. Typically, annuities are purchased by investors who seek to guarantee themselves a minimum income stream during their retirement.

Instead of using the victim’s money to purchase the two annuities, however, McTaggart deposited the money into his personal account. McTaggart then allegedly attempted to mask this fraud by sending monthly checks to the victim, essentially paying her "dividends" from the money he had stolen directly from her. McTaggart then fled to Memphis, Tennessee, where he resided until he was arrested on a DA warrant on December 4, 2008.

McTaggart fought his extradition to California, which then required the DA’s Office to make a formal request to the Office of Governor Arnold Schwarzenegger for a Governor’s Warrant. After the California Governor’s Warrant was obtained, it was forwarded to Tennessee Governor Phil Bredesen, who in turn issued his own Governor’s Warrant. McTaggart was served with this warrant on March 3, 2009 in Memphis. Ten days later, on March 13, 2009, he was returned to California by San Francisco police inspectors and booked into San Francisco County Jail, where he has remained in custody in lieu of $300,000 bail.

McTaggart was originally charged with Residential Burglary (a violation of Penal Code section 459 in the first degree), Grand Theft From an Elder (a violation of Penal Code section 368(d)), and Grand Theft (a violation of Penal Code section 487(a)). McTaggart faced a total of eight years in state prison, a fine of $10,000 and an order to make full restitution to the victim.

This case was prosecuted by Assistant District Attorney Alan Kennedy. San Francisco Police Department Inspector Greg Ovanessian led the investigation.

Since taking office in 2004, DA Harris has made the prosecution of financial crimes and the protection of consumers a priority by forming two specialized prosecution units focused on Elder Abuse and Real Estate Fraud, and High-tech Crime and ID Theft. From January 2008 to the present, the SFDA High-tech Crime and ID Theft Unit has charged approximately 75 cases. Additionally, DA Harris has expanded the SFDA Consumer Protection Unit (which has handled over 450 consumer complaints so far this year).

The SFDA’s office recently received a two-year federal grant of $1,066,026 from the US Department of Justice, Bureau of Justice Assistance. With these funds, the SFDA’s office has expanded its efforts to fight financial crime by creating a stand-alone Mortgage and Investment Fraud Unit. The newly created unit, consisting of one prosecutor and two investigators, is part of the SFDA Special Prosecution Division.

The SFDA was one of eight jurisdictions across the country to win a grant for the purpose of reducing mortgage fraud and crime related to vacant properties. The grant program is part of the Federal Recovery Act. Over 3,500 agencies and organizations applied for the Edward Byrne Memorial Competitive Grant Program for FY 2009 to secure funding for a wide variety of purposes. Awards were made to only 3.3 percent of applicants.

Additionally, the grant will allow the SFDA to expand the consumer public education and legislative advocacy campaign that the office began in April 2009. DA Harris joined with Assessor-Recorder Phil Ting to spearhead local legislation that regulates mortgage loan modification consultants doing business in San Francisco. The legislation was signed into law in September 2009. Additionally DA Harris conducted a successful outreach campaign to seniors and residents living in the San Francisco neighborhoods hardest hit by the mortgage crisis. Assessor-Recorder Ting, members of the SF Board of Supervisors, community organizations and consumer groups were key partners in these efforts.