The jackpot is small or nonexistent if the old person takes his time dying.
  • The jackpot is small or nonexistent if the old person takes his time dying.
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On June 16 of this year, the California Department of Business Oversight issued a desist and refrain order to Encinitas’s Lawrence (Larry) Freeman and two of his many now-defunct companies, Yeshilkoy Insurance Services and Structured Marketing.

Investors Soon Get the Bad News

In peddling financial products, Freeman made “an untrue statement of material fact to investors,” charged the department. Freeman boasted that his product was “a no-risk investment.”

Freeman sold investment contracts to people who handed him millions of dollars, and he should have registered those contracts as securities, said the state. It was the second such offense for Freeman.

Gregg G. lost $400,000 buying into Freeman’s scheme. “What should [Freeman] desist and refrain from doing?” complains Gregg, who wants to see a criminal investigation.

He went to the Federal Bureau of Investigation, the San Diego police, the federal Commodity Futures Trading Commission, the San Diego district attorney’s office, the state attorney general, and the state Department of Insurance before getting what he calls “worthless actions” from the California Department of Business Oversight.

Beginning in 2007, Freeman took in millions of dollars. He was promising investors 36 percent a year — a return so high it should have been a scam tip-off. He told his victims that he needed their money so he could purchase discounted life-insurance policies of rich, elderly policyholders not expected to live long. Initially, Freeman would pay the premiums.

Viaticals, or Death Bets

He called these deals “senior life settlements,” although they are a form of viatical settlement that is more realistically known as a “death bet” because the jackpot is small or nonexistent if the old person takes his time dying. For decades, anti-scam agencies such as the FBI and Securities and Exchange Commission have warned investors about death bets. Some con artists don’t even buy viaticals with investor money — they simply pocket the money they raise.

In 2012, Gregg sued Freeman and some of his companies for fraud. The suit stated that Freeman promised to purchase viaticals, “but he was not in the business of purchasing and selling viatical products.” Nor was he licensed to deal in viaticals, and he never had any intention to pay back Gregg’s money, said the suit. Gregg won and got a judgment, but Freeman has not paid.

San Diego investors got their “Dear John” letter on March 14, 2008. Freeman said he could not pay returns but would be able to resume the payments in five months.

Eric Matz, who put in $100,000 and lost a fourth of it, says, “I was told he had a big lump sum of money [raised from investors]. He explained he had all this money and invested it in a company that went broke. He gambled everybody’s money on a big return, and it didn’t pay off.” Matz realizes that Freeman had no investor authority to put the money into anything but viaticals.

As months passed without payments, investor indignation rose. “I was surprised the guy was walking around with both legs,” says Matz. “If he had taken money from the wrong people, they would have taken him out.” (And not to a fancy restaurant.)

Dr. Gene Muse of Oklahoma City lost $912,000 investing with Freeman, and much of it was from his employees’ pension fund cache. He sued Freeman and also got a judgment that Freeman has not paid. Muse’s attorney, Shawn Fulkerson, deposed Freeman under oath. Freeman admitted that only some of Muse’s money went into senior life settlements. Much went into Structured Marketing, a company he had set up. Freeman also revealed that he had put investors’ money into a pen that supposedly could digitize handwriting and an unexplained adventure in the soap business. He tried to set up a hedge fund. He had his own bank. He had other companies such as CDO Capital.

L. Donald Guess, His Buddy

Freeman admitted under oath that he had done business with L. Donald Guess, a former Coronado dentist who had set up a tax-shelter plan for doctors and dentists. In 2004, a federal judge froze more than $500 million in assets owned by those professionals through Guess’s Xelan operation. The Internal Revenue Service and FBI raided Guess’s headquarters. The IRS thought Xelan was an abusive tax shelter. Guess entities went into bankruptcy.

Guess eventually won that case, but in 2010 he was sentenced to serve 18 months in federal prison for filing false income-tax returns. In 2012, after Guess had been released from prison, an appeals court ruled that he had concealed assets from his ex-wife.

In the deposition, Freeman glowingly called Guess his mentor. Freeman had made a deal to purchase “intellectual property” from Guess — basically, a marketing program to sell insurance products to health professionals. Freeman committed to pay Guess $1.8 million but didn’t pay all he owed, according to the deposition. Guess, while operating his tax shelter, had relationships with offshore tax havens Barbados and the British Virgin Islands.

Fulkerson asked Freeman if he was running a Ponzi scheme. There was no reply. The lawyer also attempted to quiz Freeman about his tax payments. After consulting with his lawyer, Freeman took the Fifth Amendment on any tax subject.

I asked Fulkerson what Freeman and Guess planned to do with investors’ money. “They never had any intentions [of] paying people back. It is alarming that these folks are not behind bars,” he says.

To Hold Investors at Bay

But Freeman has pulled a slick delaying tactic. One of his investors convinced others that good ol’ Larry will pay them back. For seven years, Freeman has been running his website. Regularly, he posts information on what he is doing to get investors’ money back. He complains about “technical difficulties” and enthuses about a “promising day,” but he never comes up with money. He tells investors not to contact him.

Freeman did not answer phone calls, so I sent him an email, asking such questions as whether he is running a Ponzi scheme, why he is taking the Fifth Amendment, and whether he has been doing offshore banking. His answer: he is a victim of the Great Recession of 2007–2009. Quoth he, “My enterprises, financed with personal and borrowed funds, were counted among the casualties of that downturn.” He did not address the specific questions.

I couldn’t find out if investors believed him, because I couldn’t get them to call me back.

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jnojr Oct. 21, 2015 @ 8:59 a.m.

Freeman boasted that his product was “a no-risk investment.”

Anyone who buys that deserves to lose their money. No risk = no return. If there's a return, it's there to compensate you for something... most likely risk!


Don Bauder Oct. 21, 2015 @ 9:06 a.m.

jnojr: True. If somebody tells you an investment is "no risk," run away as fast as you can. Best, Don Bauder


AAGregg Oct. 22, 2015 @ 6:16 p.m.

He never stated it was risk free. He simply said he has been doing this for 6 years and never had any issues. Of course, people he referred me to also backed up his reputation


Don Bauder Oct. 23, 2015 @ 10 a.m.

AAGregg: The desist and refrain order by the Department of Business Oversight stated that Freeman said to at least one investor "that this was a no risk investment." I assume that investor was probably not you. Best, Don Bauder


AlexClarke Oct. 21, 2015 @ 9:12 a.m.

So the guy who lost 900k + should be forced to pay back the money to his employees retirement fund. Shows he was stupid and greedy.


Don Bauder Oct. 21, 2015 @ 9:17 a.m.

AlexClarke: I don't know how replenishment of the retirement fund, if any, has been handled. Best, Don Bauder


ImJustABill Oct. 21, 2015 @ 2:12 p.m.

I'm not sure a cease-and-desist does much. If there is sufficient evidence of criminal fraud then charge Freeman and Guess. If they were to be convicted, the sentence should at a minimum include seizing all their assets until all victims have been made whole (if possible). That's my opinion anyway.


Don Bauder Oct. 21, 2015 @ 4:10 p.m.

ImJustABill: I agree that the desist and refrain was not sufficient. Best, Don Bauder


AAGregg Oct. 22, 2015 @ 6:40 p.m.

I am one of Freeman’s many victims as well as a victim of the State’s lack of responsibility to prosecute the Ponzi schemer Freeman. To this day, he is still a licensed insurance agent in the State of California. I can tell you first hand that enabling a person like Freeman to pull off such a scheme takes several people who will vouch for his credibility. The person who introduced me to Freeman was Mark Waganseller. Waganseller swore by Freeman, said he and his family had invested their money with Freeman for years and that Freeman was an honest person. He also stated that he himself had given Freeman $3 million to invest into the insurance fraud. He also claimed co-workers at his former Company, QuestRep, had invested large sums of money with Freeman.Waganseller was the first person to inform me that Freeman was going to have to suspend payments to the “note holders” back in Feb 2008. Steve Powell claimed he invested about $1 million and was another person who stood by Freeman. He worked with Freeman to try and get his money back. Joe Tankersly also claimed he had invested $1 million with Freeman.Even Freeman’s wife, Sheri O’Donell’s name was on a document sent to me from Yeshilkoy Insurance services, a company that went defunct in 2011. She was his secretary.Suspiciously; none of these people have filed a judgment against Freeman for their money to my knowledge.There are no assets in his name; his driver’s license has a PO Box for an address. Yet he lives on a quiet street in Encinitas, in a 3000 sq ft home. He is untraceable and hiding in is rat hole. All the traits of a con man. For those of you are interested in the warped mind of a con-man, Freeman has a website where, for the last 7 years, he has detailed his lying efforts to get people back their money. It is User ID is Note, Password is Holder. The victims have been reading his lies for 7 years in the hope they could get their life savings back. In his mind, these people loaned him money for his businesses yet there were no loan documents. For those of you who would like to review the deposition he gave in Oklahoma, please use this link and see what a lowlife he is The message to other potential victims is never trusted anyone with your money until you have completely vetted them even if they work for a reputable finance company. To the Con men out there, the message from the State Authorities in California is come here to practice your financial fraud. The State does not have the resources nor do they have the time to prosecute you. It is open season on the taxpayers of California. To those victims who are still waiting and hoping to get their money back, turn him in to the FBI and DA right now. The time is for hoping is over. We are already victims of Freeman’s fraud. We do not have to be victimized again by the Authorities.


Don Bauder Oct. 23, 2015 @ 10:13 a.m.

AAGregg: I was unsuccessful trying to reach Wagenseller, Powell, Tankersly, and others. This is par for the course in such columns. Few want to speak after they have lost a bundle. The column does mention Freeman's website, and how he uses it to keep his victims from trying to reach him.

The additional details you provided here should be helpful to those who want to know more. Best, Don Bauder


soniaebv Feb. 16, 2016 @ 1:51 p.m.

Hello, I'm another victim residing in Texas and there are many others out here including my sister.. the person who introduced us to this "investment" was a professor (DiFrancesco)from the university I was attending. I just came across this article and your comments couple days ago.. I tried reporting my suspicions and concerns to local FBI since 2010. I was told they couldn't do anything here because it need it to be handled by San Diego's FBI.. I reported to different entities including San Diego FBI with no results.. so not sure what else to do??


AAGregg May 11, 2017 @ 2:57 p.m.

Hi Sonia, I just happened upon your comment concerning the Freeman fraud case. Sorry to hear it happened to you. I am the Gregg mentioned in the article. As you probably know Freeman changed his website username and password once he found out I had published them. Nothing as been done to him. Have you tried getting a username and password to the new website. Have you noticed any progress?


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