Former CEO accused in multi-million dollar investment fraud scheme

A man accused of running a multi-million dollar investment fraud scheme appeared in court for his preliminary hearing...

Posted: Apr 24, 2018 10:26 PM
Updated: Apr 24, 2018 10:26 PM

A man accused of running a multi-million dollar investment fraud scheme appeared in court for his preliminary hearing Monday.

Jacob Cooper was the CEO of Total Wealth Management in San Diego. Prosecutors allege Cooper received a referral fee for placing clients' money in certain funds. In many instances, Zipp said he received greater compensation through the referral fee than through his clients' fees, creating a "blatant conflict of interest."

"He mainly was interested in whether a particular fund would enrich him, not whether it would enrich his paying client," said Deputy District Attorney Rebecca Zipp.

Zipp said Cooper had "no regard to investor goals or suitability for the investor."

Several clients testified in court Monday morning. Loren Engel said he and his wife both invested with TWM. He said they lost approximately $165,000. Engel was not aware Cooper and TWM were receiving what many victims described as kickbacks.

"The risk of being defrauded is not a reasonable risk to assume," Engel said, when the defense asked if he understood investments have risks.

Many clients first learned about TWM through Cooper's weekly radio show. Cooper also regularly appeared on local media.

George Rasor called TWM after hearing Cooper on the radio. He testified that he invested more than $800,000. His son Jeffrey Rasor saw red flags when trying to get information about his father's investments.

"Questions not answered, not acceptably answered," Jeffrey Rasor said when recalling TWM's response after meeting with the company a few years ago. "Too much vagueness and a real concern that my father's investments were in jeopardy.

Cooper faces 19 felony counts, including conspiracy to commit a crime, elder theft, and making false statements in connect with sale of a security. Zipp said he could face a maximum of 23 years in prison if he is convicted. Cooper also faced several civil lawsuits and an investigation by the Securities and Exchange Commission.

Cooper's defense attorney, John Kirby, denies his client did anything wrong.

"He did not have the intent to enrich himself above the interest of his clients," Kirby said. Kirby said there were a number of funds where he received revenue sharing, but any conflict of interest was set out in documents.

"Mr. Cooper had no intent to cheat or steal from anyone," Kirby said. "He made bad investment decisions."

Kirby said Cooper and his family also lost money through the same investment funds. The preliminary hearing is expected to last several days. Two others connected with TWM already reached a plea deal. Doug Shoemaker and Nathan McNamee are scheduled to be sentenced later this week.

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