Fraud RoundUp

February 24, 2008

Calif. Insurance Agent Sentenced

Calif. Insurance Commissioner Steve Poizner announced the sentencing of a former insurance agent who defrauded an elderly couple of nearly $300,000. Gary Michael Jenkins, 59, of El Cajon, was sentenced Jan. 16 on felony charges and was sentenced to serve a two-year prison term and pay $291,576 in restitution to the victims’ estate, in addition to $5,000 in fines, according to Poizner.

In an investigation in which the CDI assisted the El Cajon Police Department and the San Diego County District Attorney’s Office, it was determined that between June 1, 1994 and Aug. 31, 2002, Jenkins became the trustee of his elderly client’s estate. Officials said that as an agent selling life insurance products, Jenkins manipulated a bond he formed with his clients to steal nearly $300,000 without the victims’ knowledge or consent. Additionally, Jenkins was charged with creating false documents to imply that the money he withdrew was invested legitimately.

Officials said a family member of the victims discovered the theft in 2004 and reported the crime to the El Cajon police. The San Diego County District Attorney’s Office prosecuted this case. A restitution hearing was held on Feb. 22 in San Diego County.

Ore. Woman’s Vandalism Claim Leads to Husband’s Arrest

They say problem gamblers never quit while they’re ahead, and one properly insured Oregon man apparently didn’t, either.

Ore. authorities recovered a stolen antique slot machine worth $4,000 and arrested a 30-year-old man, who they said asked his wife to help file an insurance claim to cover damage done to his van during the heist.

The slot machine was reported stolen in a burglary at a home in Sutherlin, Ore., 170 miles south of Portland, Douglas County sheriff’s deputies said. Investigators learned that the victim’s housekeeper filed a police report a day earlier claiming someone had thrown a piece of sheet metal through the window of her parked van.

The sheet metal turned out to be from the back of the stolen slot machine, with the serial number attached. Deputies said the housekeeper’s husband stole the machine, which tipped over as he drove away, breaking the van window. He told his wife the van had been vandalized and asked her to report the damage so insurance would cover it, deputies said.

Officials said the husband and another man were charged with burglary and theft, but the wife wasn’t. The case is still being investigated.

Ex-N.M. deputy insurance superintendent found guilty of fraud

Federal jurors have convicted former New Mexico Deputy Insurance Superintendent Joe Ruiz of trying to coerce insurance companies to donate money to charity in exchange for reducing regulatory fines.

The jury returned 30 guilty verdicts against Ruiz, 67, in late January. Ruiz will face prison time at sentencing.

“I felt all along that there was so much reasonable doubt that the jury would come back with a verdict of not guilty,” Ruiz said as he left the courthouse in downtown Albuquerque.

Ruiz was indicted last August on charges of mail fraud, wire fraud, deprivation of honest services, extortion, corrupt solicitation and aiding and abetting.

The indictment alleged that most of the time, Ruiz directed that companies make payments to not-for-profit health foundation Con Alma or to the Southwestern Arts Institute, which bought bilingual books for children — mostly written by Ruiz.

Con Alma was founded by Eric Serna, who was Ruiz’s boss and superintendent of the state Insurance Division.

Serna retired in 2006 in an agreement with the state Public Regulation Commission after the agency suspended him over conflict-of-interest issues, including some involving donations to Con Alma.

Ruiz testified during his trial that the contributions were voluntary and that the companies would not necessarily have been fined if they hadn’t paid. He also said Serna had signed off on everything he did.

Ruiz was fired by the PRC after the allegations against him surfaced. He was deputy insurance superintendent from June 2001 through July 2006.

PRC Commission Chairman Jason Marks said Monday the regulatory agency has a zero-tolerance policy when it comes to unethical conduct and that’s why it fired Ruiz.

Marks added that regulators have been working with Insurance Superintendent Morris Chavez to restore the public’s trust in the insurance division.

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