Fraud of the Week
Premium Fraud - California
Amount - $183,047
A former broker pleaded guilty to 90 counts including insurance fraud, grand theft, financial elder abuse, and forgery for collecting premiums and faility to place insurance for customers. Stolen payments add up to $183,047 for 32 victims over a span of eight years. The broker was ordered to pay $334,349 in restitution, which includes payment for uncovered losses because no insurance was put in place. She has been sentenced to three years of formal probation and faces 33 years in prision if she violates that probation. She was also guilty of transacting insurance without a license. Her fraudulent actions included overbilling, receiving excessive premium payments, failing to remit payment to insurers, and submitting fraudulent documents to insurers to diver premium funds to herself. The victims were exposed for a collective 10,000 days without coverage.
An investigation by the insurance department reveated that fraudulent documents were created showing the premium was $2,800 when in reality that premium was less than $900. She collected the $2,800, submitted only $400 to the insurer, which caused the policy to be canceled for the insured. Multiple consumer complaints led to the department investigation.