After a decade of waiting, dozens of North Coast investors fleeced in one of the largest Ponzi schemes in state history have recouped tens of millions of dollars from the firm found responsible for steering them toward a Santa Rosa investment adviser later sent to prison for fraud.
A group of 47 investors, most of them former employees of Fireman’s Fund Insurance Co., won a $36.8 million judgment in 2015 in Marin County Superior Court against the company they said was responsible for helping them to invest their retirement savings with AGA Financial.
The Santa Rosa firm collapsed in 2008 and its founder, Gary Armitage, was sentenced in 2013 to 10 years in state prison. The Healdsburg native was released in 2015 after serving just over two years.
Then-Attorney General Jerry Brown said Armitage and his co-defendants “callously swindled thousands of individuals out of $200 million to bankroll their extravagant lifestyles.”
After years of fruitless appeals, the case is now settled and victims have received their long-awaited compensation.
“I got back a lot, thank God,” said Dee Sunderland, a Novato nurse who lost $600,000 in investments with Armitage. “It’s been a really long haul.”
She said she regretted that her husband, Bob, a Fireman’s Fund retiree, didn’t live to see them recoup their investments.
Sunderland declined to say precisely how much she received, but said she was “very happy” with the amount.
She noted the judgment amount had grown by 10 percent per year since 2015 during the appeals, which she called a “dumb move” by the defendant in the case, Ing North America Insurance.
Val Hornstein, the San Francisco attorney for the plaintiffs, declined to comment, citing the “confidential nature of the settlement.”
An attorney for ING did not return a call and email for comment.
Most of the estimated 2,000 investors caught up in the real estate-based investment scheme had little hope of restitution.
But the former Fireman’s Fund employees and their attorneys went after the large insurer, which by then were owned by the global Munich-based financial service firm Allianz Group.
The insurer settled, but the plaintiffs pressed forward with litigation against a related firm, Successful Money Management Systems Inc. The company had conducted retirement investment seminars for Fireman’s Fund employees, seminars that involved AGA Financial.
Successful Money Management was owned by Dutch financial services firm ING from 2000 to 2003. The Marin County judge found the seminar operator to have been negligent in partnering with AGA Financial, which sunk many retirees’ investments into highly risky real estate deals put together by a convicted felon from Redding named James Koenig. Koenig, who had previously been convicted of wire fraud, was sentenced to 43 years in prison for his role in the Ponzi scheme.
Armitage appears to have relocated to Oregon. He could not be reached for comment.
Sunderland said many of the investors lost their homes in the financial collapse and had to go back to work to rebuild their retirement accounts.
She praised the attorneys in the case, who she said “worked their butts off” for years to see it through to its conclusion. Recouping some of her losses is a huge relief that means she can now live out the rest of her days in her Novato home.