A federal judge sentenced the former CEO of an Irvine-based financial services and insurance company, Mehmet Fatih Biyikoglu, a.k.a. “John B.,” 53, of Palm Desert, to 121 months in federal prison for defrauding elderly victims who thought their money was being invested in a certificate of deposit at a major bank – but, instead, was actually used to fund his lavish lifestyle. The federal judge also ordered him to pay $3,561,300 in restitution.
Biyikoglu, who pleaded guilty in July 2019 to one count of wire fraud, was the co-founder and chief executive officer of Five Star Financial Services of America. From 2014 through 2016, he solicited more than $4 million from investors, many of whom were elderly, retired or financially unsophisticated. Biyikoglu falsely told investors that their money would be placed in a Chase Bank certificate of deposit (CD), where it would earn 9 to 13 percent interest with little risk to the investors’ principle.
Tthe Chase Bank CD did not exist and Biyikoglu stole the investors’ money. Biyikoglu used the pilfered funds to finance his own lavish lifestyle, including the purchase of a Rolls Royce and other luxury automobiles. By comparison, Five Star investors lost nearly everything, including one 70-year-old victim who lost nearly all of his $1.6 million investment.
To cover up his scheme, Biyikoglu created fraudulent account statements – which included the Chase Bank logo – to deceive investors into believing their money was held in a segregated account at Chase Bank and was earning interest as promised.
During the course of the scheme, 11 investors transferred just over $4 million into Five Star. These victims suffered losses of approximately $3.45 million. Another victim lost just over $100,000 to Biyikoglu.
In January 2019, eight months after his arrest in this case and while he was free on bond, Biyikoglu removed his location-monitoring ankle bracelet and tried to flee to Mexico. He got arrested at the U.S.-Mexico border, carrying $1,300 in cash, 8,700 pesos and a significant amount of luggage.
Two co-conspirators charged in this case have pleaded guilty and are serving prison sentences imposed last year by U.S. District Judge Andrew J. Guilford. Anna Marie Holt, 60, of Fountain Valley, Five Star’s former president and chief operating officer, is serving a three-year federal prison sentence for conspiracy to commit wire fraud and subscribing to a false tax return.
Ida Shaghoian, 39, of Palm Desert, a sales agent with Five Star and Biyikoglu’s ex-wife, is serving four years in prison for wire fraud and subscribing to a false tax return. She pleaded guilty and admitted participating in the Five Star scam, and running another fraud scheme that diverted investors’ retirement savings into a risky real estate venture called Island Sea LLC. Shaghoian also admitted that she defrauded an 86-year-old man out of $100,000 after meeting him at a restaurant and leading him to think she was his girlfriend