Anthony "Trae" Carlson was arrested on October 21 and has been charged with 40 fraud-related felonies with bail set at a whopping $2.5 million...
The 42-year-old former musician was married to (Carol) Burnett's daughter, Erin Hamilton, and the couple had a son named Zachary together but were divorced in 1998.
Carlson is now married to Mariah Waterfall O’Brien, who was arrested along with her husband and mother, Arvina Joyce Carlson, 68, for the alleged fraud.
“This family conspired to rip off honest investors,” Insurance Commissioner Dave Jones said in a statement following the arrests. “Thankfully, they were apprehended before defrauding additional victims.”

The daughter of hippie musicians - her middle name is Waterfall, after the Jimi Hendrix song - O'Brien was born 24 years ago on an Ohio farm with no electricity or running water. The family later moved to L.A., where Mariah appeared in local theaters. But it wasn't until she married Saving Private Ryan star Giovanni Ribisi (the couple now have a 2-year-old daughter, Lucia) that she began to take acting seriously. Her role as the pot-smoking prostitute Tiffany in Diamonds is her first major movie appearance but certainly won't be her last.

O’Brien would solicit investors by guaranteeing annual cash returns of 16.5% for their investment in Mercy. After investors agreed to purchase membership interests in Mercy, they would sign an operating agreement with Mercy that was always executed by ATC on behalf of Mercy. Several investments were made out to “Anthony Trae Carlson and Mariah O’Brien” and on at least one investment, O’Brien was the individual who endorsed the check.

In connection with the offer and sale of these securities, SBC, Mercy, AJC, ATC, and O’Brien made, or caused to be made, misrepresentations of material fact or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. These misrepresentations and omissions included, but are not limited to the following:

Insurance Commissioner Dave Jones Announces Arrests Of Southern California Husband, Wife And Indiana Mother
Ponzi scheme allegedly bilked investors out of $2.5 million dollars
Insurance Commissioner Dave Jones announced today that Anthony Trae Carlson, 42, Mariah Waterfall O'Brien, 40, and Arvina Joyce Carlson, 68, were recently arrested and have been charged with violating multiple sections of the Penal Code and Corporations Code.

"This family conspired to rip off honest investors," said Insurance Commissioner Dave Jones. "Thankfully, they were apprehended before defrauding additional victims."

Anthony Carlson was charged with 40 felony counts, his wife Mariah O'Brien and mother Arvina Carlson were each charged with 23 felony counts...

Bail for Anthony Carlson has been set at $2.5 million dollars. Bail for both Mariah O'Brien and Arvina Carlson has been set at $1.9 million dollars. If convicted on all counts, Anthony Carlson faces a maximum sentence of 27 years, 8 months in state prison while both Arvina Joyce Carlson and Mariah O'Brien face a maximum sentence of 21 years in state prison.

According to California Department of Insurance (CDI) Investigators, between February 2005 and December 2008, all three suspects participated in an elaborate Ponzi scheme to defraud victims out of their investments. Each suspect represented to the victims that they either owned or had invested in an insurance company involved in the bail industry which they called State Bonding California. The investigation revealed that the suspects made several misrepresentations or omissions that the company conducted business in over 44 states and produced over one billion dollars in annual revenue.

At least one suspect used fraudulent multimillion dollar State Bonding California dividend checks to persuade victims to invest in the bogus company. Investments were offered to victims in the form of the sale of "membership interests" in State Bonding California. The investments were supposedly guaranteed with returns ranging between 19 to 21 percent. The suspects collected at least $2,514,650 from three different couples and one individual.

State Bonding California was never licensed to sell insurance by CDI nor was it licensed to offer securities by the California Department of Corporations. The investigation revealed that the only address associated with the company was a post office box located in Hollywood. In addition, none of the defendants were licensed to offer securities in the State of California. Investigators later determined that some of the monies collected from the victims were used to fund a lavish Hollywood lifestyle being lived by Carlson and his wife, O'Brien in the hills of Los Feliz, CA.

This case was investigated by the California Department of Insurance - Investigation Division's Los Angeles Regional Office and is being prosecuted by the Los Angeles County District Attorney's Office - Major Fraud Unit.

Anthony Trae Carlson Charged with a felony. Next court date 7/18/2012 in Los Angeles. Bail was set at $2.5 million.

His mother, Arvina Carlson, was booked in LA county jail on 3/15/2012 on felony charges, bail is $1.9 million. She is currently at Century Regional Detention Facility in Lynwood,CA. Her next court date is 7/18/2012 in Los Angeles.

From the LA County Sheriff records:

Booking No.: 2920288 Last Name: CARLSON First Name: ANTHONY Middle Name: TRAE

Sex: M Race: W Date Of Birth: 02/19/1969 Age: 42 Hair: BLK Eyes: BRO Height: 600 Weight: 150

Charge Level: F (Felony)

ARREST
Arrest Date: 10/21/2011 Arrest Time: 1100 Arrest Agency: 7059 Agency Description: LA COMMUNITY COLLEGE DISTRICT

Date Booked: 10/21/2011 Time Booked: 1318 Booking Location: 4273 Location Description: LAPD - JAIL DIVISION

BAIL (see below)

HOUSING LOCATION

Housing Location: NCCF

Permanent Housing Assigned Date: 05/09/2012 Assigned Time: 1435 Visitor Status: 0
Facility: NORTH COUNTY CORRECTIONAL FACILITY
Address: 29340 THE OLD ROAD City: CASTAIC
COURT
Next Court Code: M30 Next Court Date: 07/18/2012 Next Court Time: 0700 Next Court Case: BA38909801

Court Name: LOS ANGELES MUNI CT DIV 30 Court Address: 210 W. TEMPLE STREET Court City: LOS ANGELESUPT RELEASE No Information On Release Date.

CASE INFORMATION

Case No. Court Name Court Address Court City Bail Amt. Fine Amt. Court Date Sent. Date Sent. Day(s) Disp Code

BA38909801 Bail 2,514,650.00 .00 07/18/2012 0