Santa Barbara man sentenced for Ponzi scheme
A Santa Barbara man was sentenced Oct. 11 to 11 years in federal prison and ordered to pay restitution to victims in a $14 million Ponzi scheme.
Darrell Arnold Aviss, 64, was sentenced in federal court in Los Angeles. He had pleaded guilty in June to 21 felonies, including wire fraud, tax evasion, failure to report foreign bank accounts and aggravated identity theft.
In addition to the prison time and $14 million in restitution payments, Aviss will forfeit his interest in a Santa Barbara home worth about $4 million, according to a news release from the U.S. Department of Justice.
Aviss pleaded guilty to running a Ponzi scheme from 2012 to 2020, in which he solicited investments in annuities from insurance companies based in Switzerland.
Instead of buying annuities, he used the investors’ money “for his own purposes and to support his lavish lifestyle,” the Department of Justice said, and produced fake reports to convince his investors that they were making money.
He also used some of the money to pay back other investors and keep the scheme going. A Ponzi scheme is a type of investment fraud in which investor money is used to repay previous investors.
Prosecutors said Aviss’ purchases included mortgage payments, luxury car leases, expensive watches, trips to Monaco, more than $170,000 in purchases at nightclub in Santa Barbara, and 20 tickets to a U2 concert.
“Aviss has essentially been living a life of pure crime for about a decade,” prosecutors wrote in a 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.”
One victim lost more than $9.7 million. Another, who had been diagnosed with cancer shortly before giving Aviss his money, lost $400,000.
Aviss pleaded guilty to tax evasion because he did not file income tax returns for the 2014, 2015 and 2016 tax years and failed to pay any taxes during that period, amounting to more than $3 million in unpaid income taxes.
Aviss also failed to disclose bank accounts in Monaco, where he transferred his investors’ money. He established one of the accounts “with information from an identity theft victim,” the Department of Justice stated.
