GILROY
– A Morgan Hill insurance salesman may have scammed dozens of
investors in Santa Cruz and Santa Clara counties, lying to sell
bogus shares in a Florida company that specialized in
infomercials.
GILROY – A Morgan Hill insurance salesman may have scammed dozens of investors in Santa Cruz and Santa Clara counties, lying to sell bogus shares in a Florida company that specialized in infomercials.
Michael Drozen, 62, who is under investigation in this county, pleaded not guilty in Santa Cruz County Superior Court Thursday. Neither Drozen nor his lawyer, Tim Palm of San Francisco, returned phone calls. Drozen is now free on $200,000 bail.
When arrested on March 15, Drozen was charged with unlicensed sales of securities, selling unregistered securities, defrauding clients in the sale of the securities and elder financial abuse.
“He’s clearly targeting seniors,” assistant Santa Cruz County district attorney Bill Atkinson said Friday. “A lot of these people he has had prior contact with selling life insurance to, or annuities. He would go to these people and tell them he had investments for them that were making good money.”
The securities were for Buena Vista Infomercials Inc. of Florida. In pitching the investment, Atkinson said Drozen neglected to inform his customers of certain key facts:
• Drozen, a licensed insurance salesman, is not licensed to sell securities.
• Securities in Buena Vista Infomercials are not licensed in either California or its home state.
• Buena Vista Infomercials owner Jarred DeGray is awaiting trial in Florida for grand theft, involving shares he allegedly sold in another unlicensed company.
• Buena Vista’s products were never profitable, largely due to poor quality.
“Nothing that they’ve sold so far has made any money, except obviously for Mr. Drozen and Mr. DeGray.”
Atkinson said his case is based on seven illegal sales Drozen made or attempted to make, including a sixth deal he attempted to seal with an undercover investigator with the district attorney.
Since filing the charges, Atkinson said his office has uncovered another three or four victims in Santa Cruz County.
“Records we have received indicate there are possibly another 30 to 35 over in Santa Clara County,” he said.
Deputy Santa Clara County district attorney Mike Fitzsimmons has begun investigating Drozen’s sales. Contacted Friday, he said he has been communicating with numerous potential victims, but he wouldn’t speculate whether he expects to bring charges against Drozen in this county.
“We should know within the next week or so, I would think,” Fitzsimmons said. “We’re still in the information gathering stage. We’ve sent out questionnaires to investors.”
Fitzsimmons says he believes Drozen has returned to Morgan Hill.
