A Florida newspaper story has led to a Morgan Hill man being
charged with 78 felony counts on defrauding seniors in two counties
by selling securities that turned out to be worthless.
A Florida newspaper story has led to a Morgan Hill man being charged with 78 felony counts on defrauding seniors in two counties by selling securities that turned out to be worthless. The victims were almost entirely elderly and seven live in Hollister, Morgan Hill or Gilroy.
Michael Drozen, 62, of Morgan Hill, who is not licensed to sell securities, surrendered Friday at Santa Clara County Jail. He faces 57 felony counts of unlicensed sales of securities, selling unregistered securities, defrauding clients in the sale of the securities and elder financial abuse; the securities were for an infomercial company called Buena Vista.
Drozen was arraigned Monday afternoon in Santa Clara County Superior Court and released on $500,000 bail.
Assistant Santa Clara County District Attorney Mike Fitzsimmons said he added six charges at the arraignment, bringing the total to 63. Drozen’s next appearance is scheduled for Thursday afternoon when he is expected to have hired an attorney.
Attorney Tim Palm of San Francisco, appeared at Monday’s hearing but hasn’t been formally retained by Drozen, Fitzsimmons said.
When first arrested on March 15, Drozen, an insurance salesman, was charged in Santa Cruz County with 21 counts of violations similar to those in Santa Clara County. He pleaded innocent, posted $200,000 bail, reduced from $1 million, and was released. A court date has been set for June 3.
“He’s clearly targeting seniors,” assistant Santa Cruz County District Attorney Bill Atkinson said recently. “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.”
Atkinson said the violations occurred in 2002 and 2003.
Santa Cruz County uncovered Drozen’s history of selling the securities when a resident noticed in a Florida newspaper story that Jerred DeGray, a Drozen associate, was being investigated for misdealings over another company, the Music Depot, Fitzsimmons said.
Fitzsimmons said there could be more victims.
“When there is not a return (on investments) people get angry and start wanting to get their money back,” Fitzsimmons said.
If you or someone you know were possibly defrauded by Drozen’s or a similar scam, contact the District Attorney’s office at (408) 299-7400.
Staff Writer Peter Crowley contributed to this story.
