Santa Barbara man sentenced to over 11 years in federal prison for $14 million Ponzi scheme, other felonies
LOS ANGELES, Calif. – A Santa Barbara man was sentenced on Tuesday to over 11 years in federal prison for stealing around $14 million as part of a Ponzi scheme where victims thought that their investments would be used to buy annuities issued by Swiss insurance companies, according to the U.S. Department of Justice.
Darrell Arnold Aviss, 64, pleaded guilty to 21 felonies on June 28, including five counts of wire fraud, one count of money laundering, five counts of engaging in monetary transactions in criminally-derived property over $10,000, three counts of tax evasion, six counts of willful failure to report foreign bank and financial accounts, and one count of aggravated identity theft.
Aviss ran his Ponzi scheme for roughly eight years, from at least 2012 through the summer of 2020, according to Ciaran McEvoy, spokesman for the U.S. Attorney's Office in Los Angeles. He reportedly solicited money from people who wanted to purchase annuities from insurance companies based in Switzerland, and claimed that the Swiss annuities he offered were safe and secure.
In some instances, Aviss told the victims the annuities would pay interest rates ranging from 5% to 7%, McEvoy said.
However, Aviss did not use the victims' money to purchase annuities despite arranging for the victims to receive fabricated statements showing the purported value of the annuities – which the false documents showed were increasing over time.
The victims, who were mostly over the age of 60, gave Aviss more than $14 million. Most of that money came from just one victim, McEvoy said. Aviss did pay back some of the money in order to keep the scheme running, he added.
Aviss used the victims' money for his own purposes and "to support his lavish lifestyle," McEvoy said, adding that some of the money was used on Ponzi payments to victims, mortgage payments, luxury car leases, expensive watches, trips to Monaco, more than $170,000 at a Santa Barbara night club, and 20 tickets to a U2 concert and after-party.
One of Aviss' victims lost more than $9.7 million in the scheme, and Aviss stole $400,000 from another victim who he knew had recently been diagnosed with cancer, according to the prosecution's sentencing memorandum.
“Based on the financial records and his statements to the probation officer, Aviss has had no source of money – no real job – since at least 2012, apart from the money he stole from the victims, including retirees who denied themselves luxuries to save up the nest eggs Aviss stole.”
The U.S. Attorney's Office also claimed that he defrauded the United States by failing to file tax returns for 2014 through 2016 and failing to pay any income taxes for those years – which equaled more than $3 million in income taxes.
Additionally, he failed to file with the Department of the Treasury Reports of Foreign Bank and Financial Accounts between 2015 and 2020 in order to conceal accounts he controlled in Monaco, where he deposited "some of his ill-gotten gains," McEvoy said. Aviss then transferred the victims' money to the offshore accounts.
Aviss was sentenced on Tuesday to 133 months in federal prison.
U.S. District Judge Stanley Blumenfeld Jr. ordered Aviss to pay approximately $14.5 million in restitution and to forfeit his interest in a Santa Barbara home worth around $4 million, according to McEvoy.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 833-FRAUD-11 (833-372-8311).
