LOS ANGELES
Officials stated that a Santa Barbara man was sentenced Tuesday to 11 years in federal prison for stealing approximately $14 million from victims.
According to authorities, the victims thought their investments would be used to purchase annuities issued by Swiss insurance companies and for failing to pay over $3 million in federal income tax.
U.S. District Judge Stanley Blumenfeld Jr. sentenced Darrell Arnold Aviss, 64.
The judge also ordered him to pay $ 14 million in restitution and forfeit his interest in a Santa Barbara home worth approximately $4 million.
At Tuesday’s court hearing, Judge Blumenfeld, who remanded Aviss into federal custody, described Aviss as “cruel, callous and self-absorbed” and adding, “the devastation, in this case, is real.”
On June 28, Aviss pleaded guilty to 21 felonies: five counts of wire fraud, one count of money laundering, five counts of engaging in monetary transactions in the 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 from at least 2012 through the summer of 2020, soliciting money from people who wanted to purchase annuities from insurance companies based in Switzerland, officials stated.
Aviss claimed the Swiss annuities he offered were safe and secure, and, in some instances, he told victims the annuities would pay interest rates ranging from 5% to 7%.
But Aviss did not use the victims’ money to purchase annuities, even though he arranged for the victims to receive fabricated statements showing the purported value of the annuities, which the false documents showed were increasing over time.
Victims, most of whom were over the age of 60, gave Aviss more than $14 million, with most of that money coming from just one victim. Some money was paid back to victims to keep the scheme running.
Instead of purchasing annuities, Aviss used the victims’ money for his own purposes and to support his lavish lifestyle.
He used the money for, among other things, Ponzi payments to victims, mortgage payments, luxury car leases, expensive watches, trips to Monaco, more than $170,000 in purchases at a Santa Barbara nightclub, and 20 tickets to a U2 concert and after-party.
One victim lost more than $9.7 million in Aviss’ Ponzi scheme.
Aviss stole $400,000 from another victim whom he knew recently had been diagnosed with cancer, according to the prosecution’s sentencing memorandum.
“Aviss has essentially been living a life of pure crime for about a decade,” prosecutors wrote in a sentencing memorandum.
Adding, “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.”
Aviss also defrauded the United States by failing to file tax returns for 2014, 2015 and 2016 and failing to pay any income taxes for those years. Aviss evaded paying more than $3 million in income taxes.
Aviss also failed to file with the Department of the Treasury Reports of Foreign Bank and Financial Accounts for 2015 through 2020. This was an attempt to conceal accounts he controlled in Monaco, where he deposited some of his ill-gotten gains.
He transferred victims’ money to these offshore accounts, one of which was established with information from an identity theft victim.
The FBI and IRS Criminal Investigation conducted the investigation in this matter.
Assistant U.S. Attorneys Monica E. Tait and Ali Moghaddas of the Major Frauds Section prosecuted this case.
Assistant U.S. Attorney Daniel G. Boyle of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this case.