Workers’ Compenstion Insurance is a type of “property and casualty” business insurance required in all states, except Texas where an employer may opt out. It is referred to as a “line” of insurance coverage and is purchased from an insurance agent or broker.
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Weekly Fraud Blotter from Lexis/Nexis: September 18, 2009
In another victory for CDI, Insurance Commissioner Steve Poizner announced a former insurance broker was ordered to pay $119,427 restitution to five victims, following a conviction of eight felony counts including elder abuse, grand theft and computer fraud. He was sentenced to serve one year in Los Angeles County Jail on August 12.
“Any agent or broker who attempts to cheat customers by pocketing their premiums and leaving them exposed to losses will face serious consequences,” said Commissioner Poizner. “Jail time, fines and restitution are only the beginning for these unscrupulous criminals.”
According to CDI investigators the conviced broker collected at least $6,895 from five clients between August 2006 and September 2007, for the purpose of purchasing insurance products (homeowners, commercial general liability and workers’ compensation). Although he placed coverage for two clients, he but allegedly failed to remit any premium, resulting in the insurance company sending cancellation notices on both policies. Both of these clients paid premium directly to the insurance company to reinstate their policies.
The broker allegedly failed to place and remit premiums to any insurance company for three other clients and purportedly issued bogus certificates of insurance to two of these clients to give the impression the coverage was legitimate.
The alleged scam was discovered by the son of one of the victims, a senior citizen, who attempted to file a claim when his father’s home was damaged in a fire. This victim had neither received a certificate of insurance nor a policy. It was discovered the defendant failed to place any coverage on the victim’s home, resulting in an uncovered loss to the senior exceeding $110,000.
Reposted with Permission Visit LexisNexis for more information and full reports.
The latest workers’ comp fraud blotter see http://law.lexisnexis.com/practiceareas/Workers-Compensation-Law-Blog/workers-compensation-fraud-/Workers-Comp-Fraud-Blotter-9182009—Recent-Arrests-Charges–Convictions
WC Books: http://www.reduceyourworkerscomp.com/workers-comp-books-manuals.php
WC Calculator: www.reduceyourworkerscomp.com/calculator.php
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