The
following excerpts are reprinted from the 9/27/08 issue of The Californian. For
a complete text please go to: http://www.nctimes.com/articles/2008/09/26/news/californian/riverside/zd68452ea010c7b73882574d10007f10c.txt
For more current articles on Mortgage Fraud, Foreclosure Fraud and Elder Abuse Housing Fraud.
Elder Fraud "Mastermind' Gets 127 Years.
RIVERSIDE ---- The largest case of elder fraud in Riverside
County concluded Friday with Daniel William Heath, whom a judge called
the "mastermind" of the criminal enterprise, being sentenced to 127
years in state prison. Heath, 51, of Chino Hills, is the last of the
three men convicted by a jury in January to be sentenced for their part
in a massive Ponzi operation that involved more than 1,800 victims ----
mostly elderly ---- nationwide.
More than $187 million was lost by the victims, many from Southwest
County, after they invested in a variety of entities including D.W.
Heath & Associates and Private Capital Management Inc., also
known as Private Collateral Management Inc. Money coming in to the
entities from new investors was used to pay earlier investors, which
prosecutors said is the classic way an illegal Ponzi, or pyramid,
scheme operates.
Before Judge Ronald Taylor rendered the sentence Friday, 10 of Heath's
victims spoke, sharing a collection of stories about how the scam
devastated their lives. "It's all gone," Patricia Patterson said of her
retirement savings, which she entrusted to Heath. "Dreams die so hard,"
she said. John Jay said he and his wife often don't have enough money
now for essentials such as food, water, heat and medical expenses.
Angered at one point while speaking, Jay began screaming at Heath,
saying, "You're a filthy, rotten rat, you hear that?" Susan
Perkins told the judge that meeting Daniel Heath was the second worst
day in the lives of her and her husband. Only the day their only child
died was worse, she said. She and her husband each worked for 30 years
to save for a happy retirement and lost it all to Heath, Perkins said.
"Sixty years of work just went away. What did we work for?"
Prosecutor Michael Silverman also read comments from other victims who
were not at the sentencing, some of whom said loved ones suffered
strokes after hearing what happened to their money. Some now have
trouble paying for medical care, while others said they're in their 70s
and have had to return to the work force to make ends meet. Comments
read by the prosecutor included: "This is as bad as armed robbery as
far as we're concerned," "I will never trust anyone again," and "If I
don't live too long, I'll be OK."
Taylor said he wasn't persuaded to alter the sentence by anything said
by Heath's attorney or his family. The judge explained that there are
17 things he can consider for granting probation, and 14 of those
leaned strongly against that approach. Taylor called the impact Heath's
crimes had on his victims "immeasurable." "Without a doubt, he ruined
the lives of many, many people," Taylor said. "Some have actually
passed away after hearing of the loss of their life savings."
Law enforcement shut down Heath's operations in April 2004, when they
served a number of search warrants at his offices, including one in
Temecula. Also convicted earlier this year were John Heath, Daniel's
81-year-old father, and Denis Timothy O'Brien, 53, of Yorba Linda. All
three men were convicted of a variety of felony charges, including
selling unqualified securities, elder abuse, violating a court order to
stop selling securities, selling securities by misrepresentation, grand
theft, burglary and money laundering. O'Brien received a sentence of 40
years in prison, while the elder Heath was sentenced to 28 years. John
Heath suffered from advanced cancer and died in prison on Aug. 17. A
fourth defendant, Larre Jay Schlarmann of Carlsbad, pleaded guilty in
November 2005 and received a 15-year prison sentence in exchange for
his plea.
Contact staff writer John Hall at (951) 676-4315, Ext. 2628, or jhall@californian.com.
Comments(8)