Adjuster, Accomplices Arrested for Fraud

A Fullerton insurance claims adjuster and two accomplices were arrested April 8 by California Department of Insurance fraud investigators for their alleged participation in an auto insurance fraud scheme.

According to investigators, Leonardo Davinci Hines was employed by Robert Moreno Insurance Services in Fullerton, California between Dec. 20, 2001 and Jan. 15, 2003. Hines has been charged with eight felony counts of grand theft and five counts of insurance fraud.

Fredrick Jerome Hines, the brother of Leonardo, has been charged with five counts of grand theft, and Joslynn Brown has been charged with one count of grand theft and insurance fraud. The case is being prosecuted by the Orange County District Attorney Office.

Leonardo Hines was allegedly involved in a scheme to introduce “stuffed” passengers into vehicle accidents for which he was administering the claims. CDI Fraud Division was notified that Hines was issuing unauthorized bodily injury settlement checks. Leonardo Hines allegedly issued 13 checks, totaling $54,477, for the settlement of bodily injury claims to claimants that were not involved in the automobile collisions.

Investigators found that from eight claim files, Leonardo Hines authorized checks payable to Fredrick Jerome, Gerome Fredrick, Jerome Hines, and Joslynn Brown. None of these individuals were involved in any of these eight separate automobile collisions.

Investigators say Fredrick Hines deposited into his personal bank account a total of $29,978 from seven different checks. These seven checks were allegedly made payable to various aliases used by Fredrick Hines. Fredrick Hines also allegedly purchased bicycles at City of Bicycles in Inglewood with a check issued by Leonardo Hines to City of Bicycles in the amount of $1,500.

Joslynn Brown was an alleged claimant involved in an automobile collision that occurred on July 17, 2002. A check in the amount of $5,140 was deposited into her personal checking account. Shortly thereafter, Brown allegedly issued a check to Hines for half of the amount deposited.

Investigators also allege Brown and Leonardo Hines submitted false medical reports to substantiate a bodily injury claim.

Calif. Broker Arrested on Seven Counts of Grand Theft

Insurance broker Robert Stephen Rice was arrested on seven felony counts of grand theft at his home in Thousand Oaks, California, by the CDI Fraud Division.

The arrest is the result of an investigation by CDI. The Van Nuys District Attorney’s Office filed a felony complaint and arrest warrant against suspect Rice on April 11, 2005.

According to investigators, CDI received several complaints from Rice’s insurance clients alleging that they had paid Rice thousands of dollars in insurance premium, but had not received policies or refunds. During a period of November 2001 through February 2004, Rice allegedly accepted more than $262,666 in insurance premium monies from seven victims for general liability/construction wrap policies and commercial apartment building policies. Construction wrap policies cover general contractors, subcontractors, architects, etc., under one policy for a period of 10 years after a project is completed for any construction defect problems that may arise.

Rice allegedly did not send the premium monies he accepted from the victims to the insurance carriers. Instead Rice allegedly created bogus documents and forged signatures of insurance company executives and presented the bogus documents to the victims as evidence of insurance. However, the policies did not exist, which put the victims at risk.

Former Claims Adjuster Arraigned on Grand Theft, Forgery Charges

Former American Financial Group claims adjuster/litigation specialist Stephen Glenn Pirkey was arrested April 27 and charged with embezzling his employer out of more than $490,000 during his employment in the Los Angeles area office between 1998 and 2004. The arrest is the result of an investigation by the CDI. The Los Angeles District Attorney’s Office Major Fraud Division has filed one count of grand theft and one count of forgery against Pirkey for his alleged criminal activities.

Pirkey allegedly issued at least 135 insurance settlement drafts over a period of six years to his friends knowing that they had no legitimate claims against his employer. Pirkey allegedly used his authority as a senior adjuster to access his employer’s reserve funds. Pirkey, a.k.a. Steve Gambino, allegedly misrepresented the source of the drafts to his friends and sought their assistance in converting the drafts into cash. Pirkey also represented himself as an entertainment lawyer and a member of the Gambino family to the same individuals in order to gain their trust. The investigation was launched in June 2004 when the CDI received a complaint from Pirkey’s employer.

Suspects Arrested in Alleged Theft Ring

Police arrested 10 Thai nationals for their alleged participation in a car theft ring in California that resulted in millions of dollars in losses for insurance companies and car dealerships, according to the Associated Press.

Malidar Uthainatapong and Naraporn Uthainatapong of Lynwood; Boonplod Klunchoo of Downey; Eric Boutatay of West Covina; Pamela Newton of Anaheim; Jane Chokemesil of Norwalk; Porpen Tunsupaphol and Mary Utha of Los Angeles; and Jaruporn Samanukorn and Yuwanda Samanukorn, both of Sun Valley, were arrested on embezzlement and auto theft charges. They were all released on bail.

The suspects allegedly were paid $1,000 to lease cars. Other suspects then allegedly installed global positioning systems in the cars, which were located and stolen before selling them again to other buyers. The scam reportedly cost $10 million in losses to dealerships and insurances, with more than 100 vehicles fraudulently leased from dealerships in Hermosa Beach and Los Angeles County. Losses included value of the vehicles and insurance payouts. Some of the vehicles have been recovered.

Suspects Arrested for Comp Fraud

Authorities arrested four suspects May 6 after an extensive investigation into a workers’ comp and payroll tax fraud scheme, one in which the suspects allegedly underreported the payroll of its Saratoga firm by nearly $5 million.

The suspects have been charged with multiple felony counts resulting from the investigation, which was conducted by CDI’s Fraud Division, the Santa Clara County District Attorney’s office, the Contractors State License Board, the Employment Development Department, and the Special Investigations Unit of the State Compensation Insurance Fund.

According to investigators, the scheme evolved around a construction framing firm called Castle Rock Industries, also known as Sequoia Construction Company. Between July 2000 and November 2004, the firm allegedly underreported its payroll to its workers’ comp insurance carriers by as much as $4.6 million. That cost the insurers, State Compensation Insurance Fund, Clarendon National Insurance Company and Virginia Surety Company, approximately $2.3 million in premiums.

In addition, since the firm allegedly did not report its entire payroll, it was able to outbid competitors for several public works projects, including work for the Gilroy Unified and Antioch Unified school districts.

Evidence seized during the investigation revealed that Castle Rock appeared to have been paying its employees by cash and circumventing the workers’ comp claims process by paying medical providers directly for the treatment of injured employees.

The four owners of the firm are Wade Ellis Peebles and his wife, Gigi Peebles, a.k.a. Rosemary Morin, both of Saratoga; Peter Morin (Gigi Peebles’ brother) of San Jose; and Kevin Stimson Killeen of South Lake Tahoe. They will be charged with multiple felony counts of workers’ comp premium insurance fraud and payroll tax fraud.

Robert Hartford Wyckoff Jr. of Mariposa, and Gabor Maghera of Turlock will be charged with workers’ comp insurance fraud related to this case. They were the alleged contact and authorization employees for payroll processing.

Wade Peebles and Wyckoff Jr. have not been taken into custody yet. Gigi Peebles was arrested at her home in Saratoga, Morin was taken into custody at his home in San Jose, Killeen was arrested at his home in South Lake Tahoe, and Maghera was arrested at his home in Turlock.

If convicted, Wade and Gigi Peebles, Killeen and Morin could face up to 12 years and eight months in prison, and/or a $50,000 fine. Wyckoff and Maghera could face up to five years in prison and/or a $50,000 fine. The case is being prosecuted by the Santa Clara County District Attorney’s Office.