400 guilty verdicts in Heath fraud scam

The final tabulation of verdicts is in for the $190 million investment fraud scam that took the life savings of many Orange County seniors: 400 guilty and one not guilty.

A Riverside County judge heard the last 153 verdicts in a Corona courtroom Friday in the trial against Daniel W. Heath, 51; his father, John Heath, 81, and a former associate, Denis T. O'Brien, 53. The first 248 verdicts were read Thursday before the court adjourned for the day.

Ingrid Wyatt, a spokeswoman for the Riverside district attorney, said there were so many guilty verdicts that she didn't have an immediate breakdown of how many were against each defendant. She said the one not guilty verdict was a technicality because the victim was not 65 when the fraud took place, which is required for an elder abuse conviction.

The three defendants were accused of running an illegal Ponzi scam in which money from new investors was used to make payments to earlier ones, giving the impression that the firm's investments were profitable.

Over a 10-year period, the Daniel W. Heath & Associates firm, with offices in Brea and Hemet, took in almost $191 million from about 1,700 investors, many in Orange County. None of the three was licensed to act as an investment broker and the securities they sold weren't qualified by federal or state regulators, prosecutors said.

Prosecutors said that more than half the money taken in by the Heath firm – about $100 million – was spent on payments to prior investors and the firm's overhead.

The three defendants face numerous years in prison. Daniel Heath could be sentenced to up to 117 years in state prison; John Heath up to 28 years, and O'Brien up to 37 years, Wyatt said. None of the defendants' attorneys could be reached for comment.

Sentencing for John Heath was set for Feb. 22; O'Brien, Feb. 29 and Daniel Heath, March 21. Daniel Heath's sentencing date was later because his attorney submitted a motion for a new trial, Wyatt said.

Daniel Heath's attorney, Barry O. Bernstein, contended during trial that his client relied on the advice of lawyers and accountants and believed his firm was in compliance with the law.

Attorneys for John Heath and O'Brien portrayed their clients as unaware of any wrongdoing at the firm and blamed Daniel Heath, the chief executive.