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

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

“I have zero tolerance for licensed agents who take advantage of customers and tarnish the reputation of the insurance industry,” said California Insurance Commissioner Dave Jones in a statement. “Consumers should be able to depend on their agent to follow the law. My department vigorously investigates and prosecutes dishonest agents.”

Authorities believe that on March 29, 2011, Paredes (dba GER Insurance Services in East Los Angeles) added herself and her 2011 Honda Civic to a client's auto insurance policy, without the person's knowledge or permission, as of March 19, 2011. On March 28, 2011 Paredes was involved in a collision with an uninsured motorist. As a result of that collision, she collected more than $11,000 in reimbursement for damages from the insurance company.

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

In May 2011, an inquiry into an insurance payment for the additional 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 Los Angeles County District Attorney prosecuting the case. If convicted, the former agent faces a maximum of 5 years in county jail.

Source: The California Department of Insurance

Special Reports /

Policyholder's Tip Leads to Dishonest Agent's Arrest

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