Former insurance agents sentenced to combined 10yrs in prison in California
Two former insurance agents were sentenced to a combined 10 years in prison in California after being found guilty of a life insurance scheme.
The former insurance agents have also been ordered to pay $150,000 in restitution to insurance. The former insurance agents pleaded no contest to multiple felony counts of insurance fraud, grand theft, and forgery after falsifying life insurance applications to collect over $150,000 in unearned commissions, according to the Department of Insurance of California.
"To those contemplating insurance fraud, let this be an example that this crime is a felony," said insurance commissioner Dave Jones. "This is a significant conviction and sentence on an insurance fraud case and it sends an important message to those who commit fraud-we will find you and you will be prosecuted. We are committed to working with our law enforcement partners to bring justice to those who rip off insurers and consumers for their own financial gain."
The two former insurance agents were arrested in April 2017 after an investigation by the California Department of Insurance and US Immigration and Customs Enforcement's (ICE), Homeland Security Investigations (HSI) revealed that they submitted over 200 fraudulent life insurance policy applications to various life insurance carriers to collect over $150,000 in unearned commissions.
The investigation found the former insurance agents conducted this advanced commission scheme by illegally using licenses from other licensees and obtaining personal information for the fraudulent applications by recruiting applicants with money and promises of free life insurance policies. They also stole identifying information and on some polices had themselves as the purported policyholders, according to the Department of Insurance of California.
The applications submitted to the insurance carriers contained misrepresentations and fabricated information, including false occupations, income, net worth or beneficiary information. Some of the applications also contained forged signatures of the alleged applicants. Generally, premium payments were not paid by the applicants but instead paid from accounts owned by the two former insurance agents, or from accounts opened by other individuals who assisted them in carrying out the scheme, according to the Department of Insurance of California.
"Insurance fraud is a serious offense that drives up insurance costs for all of us," Los Angeles County District Attorney Jackie Lacey said. "These convictions represent my office's continuing effort to aggressively protect consumers and businesses from all types of fraudulent activity."
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