Irvine financial firm co-founder gets prison for fraud
The co-founder of an Irvine-based financial services and insurance company was sentenced Tuesday to more than 10 years in federal prison for his role in carrying out a multi-million dollar investment fraud scheme.
Mehmet Faith Biyikoglu, of Palm Desert, was sentenced to 121 months behind bars and ordered to pay approximately $3.5 million in restitution in connection to a scheme aimed at “elderly, retired or financially unsophisticated” victims, according to the U.S. Attorney’s Office.
According to federal prosecutors, the scheme was carried out between 2014 and 2016 while Biyikoglu served as chief executive officer of Five Star Financial Services of America, an Irvine-based financial advisory firm.
Biyikoglu promised investors that their money would go toward a Chase Bank certificate of deposit and earn 9% to 13% nine to thirteen percent interest with little risk to their principle, prosecutors wrote in a sentencing brief filed with the court.
But prosecutors say the promised certificate of deposit did not exist, with the investors money instead used by Biyikoglu to fund his “lavish lifestyle,” including luxury cars, jewelry and a semi-professional football team.
“Defendant’s conduct is reprehensible,” Assistant U.S. Attorney Scott Tenley wrote in the sentencing brief. “He targeted elderly and retired investors who would be seeking a safe vehicle for their retirement savings, knowing full well that those victims depended on those assets to support themselves during their remaining years.”
“He has left many of his victims with nothing, forcing them to live on fixed incomes,” Tenley added. “And he did so to finance a frivolous, short-lived life of luxury.”
Prosecutors noted that after his arrest and indictment, Biyikoglu attempted to flee to Mexico, only to be caught at the border. He ultimately accepted a plea agreement, though prosecutors allege he violated the terms by subsequently “attempting to shift blame to others.”
Biyikoglu’s attorney, Karren Kenney, argued in her sentencing brief to the court that other employees at Five Star Financial Services were the “main conspirators,” with Biyikoglu playing a “minor role as CEO with the company who oversaw generic interactions with clients.”
Kenney also contended that Biyikoglu had a “severe drinking and gambling problem” that left him “impaired” during the time period when the fraud was taking place.
“His offense is completely uncharacteristic when viewed in the context of his entire productive adult life,” the defense attorney wrote.
The other employees charged as co-defendants in the case have both been sentenced to prison. Anna Holt was sentenced to 36 months in prison, court records show, while Ida Shaghoian received a 48 month sentence.
Anna Holt, the president and chief operating officer of Five Star, was sentenced to 36 months in prison, court records show. Ida Shaghoian, a sales agent with Five Star and Biyikoglu’s ex-wife, received a 48-month sentence.