SAN DIEGO -- Earlier this year, senior citizens from Arizona contacted The 10News Troubleshooter for help.

They told the Troubleshooter that their investments with a San Diego company were missing. Now, the chief executive officer of the company that allegedly bilked them is under arrest, charged with an elaborate and sophisticated scheme of fraud.

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Senior Citizens Lost Millions Of Dollars

Carmen J. Palmieri (pictured, left) is charged with 116 counts of felony fraud and theft.

San Diego County Deputy District Attorney Lisa Crawford says Palmieri defrauded 120 senior citizens out of at least $10 million.

As the Troubleshooter reported last May, most of the investors are retirees who live in Arizona.

Dave Brundage, a legally blind senior, invested his entire pension -- more than $600,000 -- with Palmieri.

The arrest warrant alleges Palmieri took investors money and used it to purchase property. Prosecutors said bank records show that Palmieri also diverted money to an offshore account in the West Indies for personal use.

Investigators said $5 million remains unaccounted for.

Palmieri, 51, was arrested on the charges Oct. 24.

At Monday's arraignment, Palmieri's attorney, James Pokorny, asked the judge to reduce bail from $5 million to a supervised release, saying his client was not a flight risk. Judge David Szumowski disagreed, but reduced Palmieri's bail to $2 million.

If convicted on all the charges, Palmieri faces a maximum sentence of 50 years.

In the meantime, Palmieri and his wife, Constance, are the defendants in a huge civil case filed by the California Department of Corporations.

Palmieri's company, National Medical Funding, sold viatical settlements -- investments in the death benefits of terminally ill patients. But investigators said the life insurance policies sold by Palmieri's company were bogus and used to defraud investors.