L.A. Broker Sentenced for Premium Theft
Lory Caballero, of Eagle Rock, Calif., a licensed insurance agent and owner of L.C. Insurance Agency, was convicted of one count of felony grand theft. She was sentenced to five years of formal probation, 20 days of community service and ordered to pay $25,000 restitution to a victim for an uninsured loss.
The case was initiated by the California Department of Insurance, Investigation Division (CDI) after the department received consumer complaints about Caballero and L.C Insurance Agency. The subsequent investigation revealed that Caballero sold insurance policies to Spanish-speaking consumers in the Eagle Rock section of Los Angeles. Caballero collected premiums from consumers but did not remit the money to any legitimate insurance company. Caballero$(Bs (Bfraudulent activities exposed at least one injured party to an uninsured loss following an auto accident.
According to the CDI, Caballero targeted the Spanish-speaking community so that any language barrier experienced by the consumer would help shield her fraudulent business practices. One victim became concerned because no proof of insurance was received from the purported insurance company. When confronted with this concern, Caballero created excuses for the non-receipt of the proof of coverage.
Former Montana Agent Pleads Not Guilty
A former Billings insurance agent pled not guilty to nine counts of forgery, two counts of insurance fraud and one count of theft in a scam that reportedly deprived victims of $587,058, according to the Billings Gazette.
Michael Don Hutton was arraigned on Sept. 13 and released without bond. Hutton$(Bs (Bagency, MD Hutton Insurance Inc., was investigated by the Montana State Auditor$(Bs (BOffice after reports of insurance fraud earlier in the year.
From July 2000 to May 2004, Hutton reportedly kept premiums for himself instead of forwarding them to insurance companies. A woman from Melstone said that she had given Hutton premiums since 1998, but she received a notice from Safeco Insurance that the premiums were unpaid. Hutton said that the insurance company made a mistake. The insurance policy was cancelled as a result.
Hutton also allegedly created fictitious companies to secure loans and reroute mail intended for victims and forged documents.
The case is ongoing and prosecutors said that there will most likely be additional charges against Hutton.
Farmers Sues L.A. Body Shop for Alleged Fraud
Farmers Insurance Exchange has begun serving civil summons and complaints upon a Los Angeles body shop and its director, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders. The civil complaint, which is similar to prior successful lawsuits against body shops that submitted false insurance claims, seeks damages for the fraud committed.
The lawsuit details a systematic scheme where the body shop billed Farmers for services that were never performed. This includes billing for parts and labor that were never provided. Once Farmers suspected fraud, it immediately inspected the cars involved and exposed physical evidence of fraud.
Farmers$(B S(Bpecial Investigations Unit, which includes body shop experts, inspected 10 vehicles repaired by Bracha Inc., dba Best of the West Carstar Auto Body and dba Exclusive Collision Center, and documented fraud in the repair invoice for each vehicle. Farmers is seeking over $250,000 in statutory damages for the intentional actions of the defendants.
