Fraud Roundup

March 26, 2007

Washington appoints advisory board

Washington Insurance Commissioner Mike Kreidler has appointed a special advisory board to monitor the agency’s fraud unit.

Earlier this year, the agency’s eight-member Special Investigations Unit began operations, after the 2006 Legislature established a fraud unit to investigate and prosecute organized insurance fraud. The newly appointed advisory board is charged with advising the Insurance Commissioner and the Legislature on the unit’s effectiveness, funding, use of resources, staffing and other issues.

The new advisory board includes members from the insurance industry, consumers, the National Insurance Crime Bureau, county prosecutors and law enforcement, Kreidler said. They are:

•David Lyons, State Farm Insurance;

•Glenn Kaleta, Safeco Insurance;

•John Tolton, Regence Group;

•Janet Paulson, Pemco;

•Bill Baldwin, Insurance Brokers & Agents of the West;

•Bill LaBorde, Washington State Public Interest Research Group;

•Kent Davis, Law Firm Technology Specialists;

•Dana McDonald, National Insurance Crime Bureau;

•Joe Wheeler, Thurston County Prosecutor’s Office; and

•Steve Boyer, Kitsap County Sheriff’s Office.

The advisory board will meet at least twice a year,. For more information, visit the Special Investigation Unit’s Web site: www.insurance. wa.gov/consumers/ Fraud/fraud_dirdefault. asp.

Man sentenced for selling fake policies

A former insurance broker/agent has been sentenced to 10 years in prison for the sale of approximately $6 million worth of fake insurance policies the broker falsely claimed were underwritten by Lloyd’s of London, according to the California Department of Insurance.

CDI investigators said Richard W. Peterson (also known as Robert James) of San Francisco, operated a brokerage firm that claimed to specialize in the placement of commercial liability insurance for restaurants and bars. Between 2000 and 2003, Peterson issued commercial liability insurance policies he said he placed with underwriters at Lloyd’s and obtained through two New York insurance brokerages: Surplus Lines Inc. and Heritage Inc., CDI said. When a broker tried to confirm coverage, he found the policies were fraudulent and had not been placed with underwriters.

Authorities at Lloyd’s advised CDI’s Investigation Division that the company did not receive any applications for insurance or any premium funds from the bogus policies. Once the fraud was uncovered, CDI and Lloyd’s advised victims to contact their insurance brokers and obtain new coverage.

Peterson pleaded guilty on July 19, 2005 to wire fraud and engaging in the business of insurance after having been convicted of a felony. U.S. District Judge Denny Chin Judge Chin also ordered Peterson to pay restitution of $6.6 million and ordered the preliminary forfeiture of $6.6 million, as well as Peterson’s interest in four properties (two buildings located in San Francisco, a condominium in Las Vegas, and a condominium in the Cayman Islands).

Topics Washington Lloyd's

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Insurance Journal Magazine March 26, 2007
March 26, 2007
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