A chief executive officer of a La Jolla-based financial firm was sentenced March 17 to one year in federal prison after he pleaded guilty to tax fraud and conspiracy to commit securities fraud.
David John Nava, 63, who stood in a suit before U.S. District Court Judge Dana Sabraw, was ordered to pay $3,716,888.27 in restitution to various victims including the Internal Revenue Service.
Nava, of La Jolla, who worked for Surf Financial Group, LLC, also pleaded guilty to operating an unlicensed money transmitting business.
He was allowed to remain free on his own recognizance and will surrender May 6 to begin his term. His attorney, Andrew Young, asked Sabraw if he could recommend Terminal Island as the designated prison.
“You’ll never see or hear of me again,” promised Nava when he gave a statement to the judge.
Nava described himself as “a screw up” for his involvement in the scheme.
Young told the judge Nava graduated from high school, but has no financial business degree.
“This isn’t his first time to try and get one over,” said Assistant U.S. Attorney Carl Brooker IV, who noted that federal securities regulars permanently banned Nava in 1994 from participating in the industry after he submitted false applications to a regulatory agency.
Brooker recommended a 15-month sentence, citing Nava’s “very serious health concerns” without specifying what they were. He pleaded guilty in October 2020, but the sentencing was repeatedly delayed, due in part to medical problems, according to court records.
“There was a lot of wrongdoing going on for many years,” said Sabraw to Nava.
“There are real victims and there has to be a consequence,” said the judge to him.
Nava concealed his involvement in the securities fraud scheme by using various attorney opinion letters in evaluating whether to clear the sale of shares of restricted stocks on public markets. Nava and co-conspirators sold millions of shares of these stocks to the investigating public, according to U.S. Attorney Randy Grossman.
Because he was banned from participating in the industry, he used a Mexican citizen to open a bank account and to transmit millions in funds as directed by Nava, according to Grossman.
“This defendant stepped outside the boundaries of legal business practices and used his business acumen and connections for a criminal purpose,” said Grossman.
“He concocted a complex, international scheme to deceive shareholders, launder proceeds of the fraud through Mexico, and hide profits from the IRS,” added Grossman.
“CEOs are not above the law,” said Chad Plantz, special agent of the Homeland Security Investigations in San Diego. “Today’s message sends a message to white collar criminals that they will be held accountable.”
Court records say Nava owes $608,908 to the IRS for not reporting the income he earned for 2014, 2015, and 2016.
“Today’s sentencing holds David Nava accountable for his crimes against the American tax system he cheated and the innocent Americans he victimized,” said IRS special agent in charge Ryan Korner. “Schemes like this cannot and will not go unnoticed.”
