CDI Makes Arrests for Grand Theft

Harrison Bailey, 54, of Yuba City, Calif., was arrested on five counts of grand theft, five counts of theft of fiduciary funds, four counts of embezzlement by an agent and one count of altering records to defraud.

Investigators from the California Department of Insurance (CDI) said Bailey was an insurance agent working at the River Valley Insurance Agency in Marysville, and reportedly made it a practice to pick up premium payments directly from his clients. The checks were allegedly made to W & B and CDI investigators allege that much of the money collected never was applied to policies.

Bailey allegedly quoted premium prices that were higher than the actual cost and allegedly pocketed the excess money. W & B is not associated with River Valley or any other insurance company account. Many clients' policies were cancelled for lack of payment; as a result some were without workers' compensation, liability or auto coverage. Bail was set at $20,000. If convicted, Bailey could face up to five years in state prison and/or a maximum fine of $50,000.

Fourteen Arrested in Fraud Sweep

The CDI and the Los Angeles County Auto Insurance Fraud Task Force arrested 14 people who are suspected of defrauding three insurance carriers in a criminal conspiracy. The suspects allegedly sold insurance policies to uninsured motorists and backdated them to cover prior traffic collisions.

The defendants have been charged with 105 felony counts, including insurance fraud and conspiracy. Combined total loss to the insurance carriers exceeds $332,177 and if convicted, the defendants would face up to five years in prison and could pay restitution.

The suspects include: Ruzanna Zeytuntsyan of Tujunga, a broker with New Wave Insurance Agency; Jack Galadijian of Van Nuys, also a broker with New Wave Insurance Agency; Sergey Yesayan of Glendale; Goar Khachikyan of Glendale; Nshan Kotoukian of Van Nuys; Grigor Yazdzhyan of Burbank; German Cano-Leiva of Northridge; Edwin Cano of Northridge; Rafik Yegiazarian of Van Nuys; Armen Gaiyan of Van Nuys; Oganes Tosunyan of Van Nuys; Gevorg Oganian of Panorama City; Gevork Akopyan of North Hollywood; and Jose Guerra of Granada Hills.

CDI began investigations after a complaint was made from an insurance carrier concerning brokers at New Wave Insurance Agency, who were allegedly backdating accidents that had occurred. This illegal activity is exchanged with the agent/broker demanding a fee. There were a number of claims investigated from three affected carriers, including Chicago Insurance Company, and Deerbrook Insurance Company.

Fugitive Arrested in Sacramento

Two counts of insurance fraud and one count of attempted perjury led the CDI to the arrest of Hamman Noel Jr., aka Kenneth Arlington, 32, of Stockton, Calif., who had been a fugitive for more than a year.

In April 2000, Noel reportedly claimed he fell down a flight of stairs at his place of employment, EdFund, located in Rancho Cordova. Prior to the fall, a surveillance video camera captured Noel allegedly setting the scene to make the fall occur. Later that day after being released from the emergency room, he reportedly claimed to trip over a metal stand at a department store. During a deposition for EdFund's workers' compensation carrier, Reliance Insurance, Noel did not mention the fall at the department store and prior insurance claims.

If convicted, Noel could face up to five years in state prison and/or a maximum fine of $50,000. Bail was set at $10,000.
Workers' Compensation Fraud Arrest

Martin Ortiz, 38, of Sacramento, was arrested on four counts of insurance fraud and perjury.

Ortiz allegedly injured his back while working as a warehouseman for General Produce Company on or about July 14, 1999. According to investigators, Ortiz reportedly filed a workers' compensation claim and was later placed on disability due to his injury.

During his temporary disability period, Ortiz was videotaped doing activities he had told his doctor he could not perform. Ortiz's alleged fraudulent activities caused Fremont Compensation Insurance Company to overpay $17,984 in benefits.

Bail was set at $10,000. Ortiz could face up to five years in state prison and/or a maximum fine of $50,000.

Woman Arrested on Grand Theft Charges

Arsenia Ann Mack, 55, of Sacramento, was arrested after she surrendered on two counts of insurance fraud and one count of grand theft.

According to CDI investigators, Mack reported a residential burglary loss on Oct. 2, 2001 to First American Specialty Insurance. She claimed that computers and other electronic devices were taken and as was asked to submit receipts to verify ownership and to determine replacement costs. The investigation revealed that Mack allegedly altered and submitted receipts that did not belong to her.

Mack admitted that she falsified four Circuit City receipts, a personal check, and two Fry's Electronics invoices, submitted them and fraudulently received $4,074.47. Bail was set at $5,000. If convicted, Mack could face up to five years in state prison and/or a maximum fine of $50,000.

Insurance Agent Charged with Grand Theft

Arshak (Mike) Rostomyan, 27, of Glendale, Calif., was arrested for allegedly selling fraudulent insurance policies and charged with three counts of grand theft.

According to CDI investigators, Rostomyan, who owns All Century Insurance Agency in Los Angeles, sold false insurance policies to consumers and collected premiums, but never submitted the money to any insurance companies. Rostomyan's activities left many victims without liability coverage and uninsured losses after having accidents.

Rostomyan allegedly targeted Latino and American consumers in the Los Angeles and Glendale areas. CDI Investigators suspect there are more victims in the case.