Former Broker Arrested in $4M Fraud Scam
Richard W. Peterson, 63, of San Francisco, a former insurance broker/agent, was arrested at Miami International Airport on federal fraud charges for allegedly selling approximately $4 million of fake insurance policies reportedly underwritten by Lloyd's of London (Lloyd's).
Peterson, also known as "Robert James," allegedly issued more than 350 fake policies to California restaurants, bars and taverns. Nearly 70 of these purported Lloyd's policies were obtained through a single California wholesale insurance brokerage.
Peterson was taken into custody by agents of the United States Postal Inspection Service (USPIS) after federal authorities in Miami were notified by investigators from the California Department of Insurance's Investigation Division (CDI) and USPIS agents from New York and San Francisco. Investigators learned Peterson left for Florida after they went to arrest him at his San Francisco home.
The complaint, unsealed in a Manhattan federal court, charged Peterson with conspiracy to commit wire and mail fraud; engaging in the business of insurance after having been convicted of a federal felony; and use of a fictitious name in a scheme to defraud.
Peterson used the names United Restaurant Services Corporation, United Restaurant Services Cooperative, United Restaurant Insurance Services and California Restaurant Specialty Cooperative (collectively known as URSC). With offices in San Francisco, Las Vegas and Avondale, Ariz., fraudulent commercial liability policies were marketed by URSC to restaurants, bars and taverns throughout California through licensed insurance brokers. The policies indicated coverage had been obtained from "underwriters at Lloyd's." Authorities at Lloyd's, however, advised CDI investigators that Lloyd's did not receive any applications for insurance or any premium funds from the bogus policies.
In 2001, Peterson was convicted of bankruptcy fraud, a felony, in the Northern District of California.
In 1999, CDI revoked Peterson's insurance license for stealing insureds' money by illegally raising their premiums, then fraudulently changing their policies to conceal the theft.
Chatsworth Man Arrested for Fraud
A Chatsworth man was arraigned on 26 felony counts on May 23 in connection with a nearly $1 million workers' compensation scam. John Theodore Zabasky, Jr., 38, was charged with nine counts of worker's compensation insurance fraud and 17 counts of grand theft embezzlement in the case. If convicted on all charges, he faces more than 10 years in state prison. Investigators expect more allegations and charges as more potential victims come forward.
Zabasky was arrested at his house on May 20 after a joint investigation by the California Department of Insurance's Investigation Division (CDI), California Division of Labor Standards Enforcement, and the Los Angeles County District Attorney's Office, which is prosecuting the case.
Zabasky, a former insurance agent, is president and owner of Softex Inc., a professional employee organization (PEO). He is charged with obtaining at least $943,000 in workers' comp premiums from client companies but failing to purchase workers' comp insurance for those firms. Zabasky allegedly supplied insurers with purportedly false workers' comp certificates.
Additionally, Zabasky allegedly collected payroll from Softex's client companies and subsequently appropriated substantial monies from Softex accounts illegally, causing hundreds of employees' payroll checks to be returned, wages to be reissued and banking fees to be shouldered by Softex client companies.
