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Former licensed insurance agent Frederick Donald Rollins, ofMoreno Valley, California, has been sentenced after pleading guiltyto one felony count of grand theft, two counts of securities fraud,and an aggravated white collar crime enhancement for stealing morethan $100,000 in insurance premiums and investment funds from 10victims.

Related: Agent & daughter charged in scheme targetinginjured workers' benefit funds

Jail & restitution

Rollins was sentenced to one year in custody and ordered to pay$100,363 in restitution to his victims.

“Many people make the mistake of thinking insurance fraud is avictimless white collar crime,” said California InsuranceCommissioner Dave Jones. “This agent left his clients at greatfinancial risk when he failed to secure their policies, leavingthem without the coverage they paid for.”

The California Department of Insurance (“DOI”) said ina statement that it launched an investigation after receivingmultiple complaints, including one from an insurance carrier aftera company attempted to file a claim for its injured employee underwhat turned out to be a non-existent policy number and the otherfrom a business owner who discovered they had no legitimateworkers' compensation or liability coverage.

According to the DOI, the investigation revealed that Rollins,while working as a licensed agent at an insurance agency, collectedpremium payments from several clients for workers' compensation andcommercial general liability coverage, but failed to place coveragewith any insurance carrier.

After leaving that insurance agency, the DOI said, Rollinscontinued to sell fraudulent policies under a corporation heregistered with the Nevada Secretary of State, but never licensedby the California DOI. The DOI's investigation revealed over$20,000 in premium payments Rollins collected from his victims,either made payable directly to him or to FDR PresidentialServices, were spent on personal expenses and not forwarded toinsurance carriers to obtain insurance coverage. To conceal thescheme, Rollins issued false certificates of insurance, whichlisted the names of valid insurance carriers as the insuranceproviders of the fraudulent policies, according to theDOI.

Never licensed as as stockbroker

In addition to collecting premium payments for policies thatwere never placed, Rollins also allegedly presented himself as aregistered stockbroker and accepted funds for investments fromseveral victims. Rollins, the DOI said, collected nearly $80,000from various individuals, including insurance clients, under theguise that he was investing their money in stocks. The Financial IndustryRegulatory Authority, a non-governmental organization thatregulates stockbrokers and brokerage firms, verified that Rollinshad never been licensed in any capacity to act as astockbroker.

Rollins failed to renew his license after it expired in March2014, according to the DOI.

Related: Miami insurance agent charged with creating fakeinsurance policies

Steven A. Meyerowitz, Esq., ([email protected])is the director of FC&S Legal, the editor-in-chief of theInsurance Coverage Law Report, and the founder and president ofMeyerowitz Communications Inc. This story is reprinted withpermission from FC&S Legal, the industry's only comprehensivedigital resource designed for insurance coveragelaw.