San Diego Man Who Ran Investment Scam That Promised Reverse Life Insurance Policies Sentenced to More Than 10 Years in Federal Prison
ANTA ANA, CA—The founder and chief executive officer of a firm that solicited more than $5 million from victims who thought they were investing in “reverse life insurance” policies has been sentenced to 121 months in prison.
Daniel Christian Stanley Powell, 34, of San Diego, was sentenced on Friday by United States District Judge Josephine L. Staton. In addition to the prison term, Judge Staton ordered the defendant to pay $4,447,290 in restitution to 59 victims.
In imposing the sentence, Judge Staton cited the impact on the victims: “Many [victims] were devastated financially and emotionally, and robbed of their futures and their children’s futures.”
Following a three-week jury trial last November, Powell was convicted of five counts of mail fraud, five counts of wire fraud and three counts of obstruction of justice.
According to the evidence presented at trial, Powell, the founder and operator of the Los Angeles-based Christian Stanley, Inc., told investors that he would use their money to purchase life insurance policies from insured individuals, at which point the company would pay the monthly premiums and become the beneficiaries to the policies. Powell claimed that Christian Stanley would profit by collecting the death benefits when the insureds died or by selling the policies on the life settlement market.
Powell trademarked the phrase “reverse life insurance” and indicated he would take company public by filing documents with the Securities and Exchange Commission.
Powell claimed that investments with Christian Stanley were safe because his company already owned $1.9 billion in reverse life insurance policies in a mutual fund. Contrary to his promises, however, the evidence demonstrated that Christian Stanley did not own any life insurance policies and had earned only $31,250 in revenue since its inception.
As part of the scheme, Powell also told some victims that their money would be invested in gold mines, but Christian Stanley had no interest in any gold mines.
At the sentencing hearing, Powell apologized to his victims. “I did a lot of wrong to a lot of people,” Powell said. “What I am going through is what I deserve.”
In total, approximately 60 victims invested approximately $5.2 million with Christian Stanley. The victims, who were located throughout the United States, invested directly through Powell, other representatives of Christian Stanley, or their own financial advisors. Victims lost approximately $4.4 million as a result of the scheme, which included funds that had been invested through individual retirement accounts.
Powell used victims’ money to make Ponzi-scheme payments to some investors, to pay commissions to representatives who recruited investors, and to create promotional materials, which gave the appearance that Christian Stanley was a legitimate and successful business.
Powell also spent victims’ funds on a luxury apartment on the west side of Los Angeles, Ferrari and Porsche automobiles, and a $35,000 donation to Usher’s New Look foundation, which got him a photograph with former President Bill Clinton that was used as part of Christian Stanley’s promotional materials.
The U.S. Securities and Exchange Commission filed a civil complaint against Powell and his firm in 2011 (www.sec.gov/litigation/litreleases/2011/lr22082.htm). The evidence at the criminal trial showed that Powell knowingly drafted false affidavits to use in his defense to the SEC case and that he lied to the victims about his assets and promised to return their money if they signed the false affidavits. This criminal conduct led to the convictions on the obstruction of justice charges.
The case against Powell is the result of an investigation by the Federal Bureau of Investigation. The Los Angeles Regional Office of the U.S. Securities and Exchange Commission provided assistance in the investigation.