On October 17, the California Department of Insurance (CDI)arrested Graciela Elena Paredes, also known as “Graciela ElenaGaxiola,” on one felony count of insurance fraud.

This came after the 36-year-old Corona, Calif. residentallegedly added herself to a client's auto insurance policy,unbeknownst to the policyholder.

“I have zero tolerance for licensed agents whotake advantage of customers and tarnish the reputation of theinsurance industry,” said California Insurance Commissioner DaveJones in a statement. “Consumers should be able to depend on theiragent to follow the law. My department vigorously investigates andprosecutes dishonest agents.”

Authorities believe that on March 29, 2011, Paredes (dba GERInsurance Services in East Los Angeles) added herself and her 2011Honda Civic to a client's auto insurance policy, without theperson's knowledge or permission, as of March 19, 2011. On March28, 2011 Paredes was involved in a collision with an uninsuredmotorist. As a result of that collision, she collected more than$11,000 in reimbursement for damages from the insurancecompany.

Upon reviewing the auto policy in April, 2011, Paredes' clientdiscovered the agent had, in fact, assumed coverage. Paredeslater admitted to the illegal piggybacking, assuring the clientthat she had since removed herself from the policy. However,Paredes omitted one crucial fact from her confession: that she hadfiled an uninsured motorist claim.

In May 2011, an inquiry into an insurance payment for theadditional coverage tipped off the client, who contacted the CDI.An investigation ensued, the culmination of which was Parades'arrest. A court date is slated for November 15, 2013, with the LosAngeles County District Attorney prosecuting the case. Ifconvicted, the former agent faces a maximum of 5 years in countyjail.

Source: The California Department of Insurance