Fraud Roundup

British Citizen Sentenced for Fraud

California Insurance Commissioner Steve Poizner announced that a state Department of Insurance investigation led to the prosecution and sentencing of a Carmel, Calif., resident for grand theft, forgery, tax evasion and transacting insurance without a license.

Michael Vousden, 59, a British citizen and Carmel resident, was sentenced to serve 14 years and four months in prison in the Monterey County Superior Court, and ordered to pay $3.8 million in restitution.

An investigation by the CDI Investigation Division revealed that Vousden created a bogus insurance company, Security Trust Insurance Ltd. Through that company, Vousden marketed and sold medical malpractice insurance to medical personnel throughout California and the United States.

CDI investigators discovered that Vousden failed to obtain a license or any certification from the state, that he had issued fraudulent documents, and that he had failed to file any tax returns.

Security Trust was licensed in the British Virgin Islands until 2001, when Vousden failed to submit audits of his business, as required by the government. The audits would have shown that the company had no cash assets to back the fraudulent policies.

Vousden was arrested by CDI investigators in 2004. At that point, he had collected millions of dollars from the sale of illegal bogus malpractice policies. Vousden used the money to purchase expensive artwork and 32 acres of prime real estate in Carmel Valley, Calif., where he had been building a residential mansion.

The investigation also revealed that Vousden failed to pay more than $2 million in loss claims, which included claims from death losses. The case was prosecuted by the Office of the California Attorney General.

Auto Fraud Perpetrator to Pay $400,000

A fraud perpetrator has pled guilty to 11 felony counts, including grand theft and insurance fraud in El Cajon, Calif., the California Department of Insurance announced. On June 11, Tam Lai, a.k.a. Timmy Lai, of Louisville, Ky., was sentenced to five years in prison and ordered to pay $415,292.96 in restitution to eight insurance companies.

In December 2004, the Auto Club of Southern California notified CDI that it suspected a group of individuals that were involved in filing fraudulent claims, CDI said. The insurer discovered that duplicate claims were being filed for the same vehicles with the same damages, and each had a similar story. The insurer also observed that all vehicle repairs were completed by the same body shop, Marshall Auto Body in El Cajon. Shortly after receiving the tip, CDI opened an investigation, which involved more than 50 auto insurance claims and 14 different vehicles.

CDI said the investigation revealed that multiple claims were filed with various insurance companies. Most of the claims came from Marshall Auto Body. Lai was the owner of the body shop and allegedly orchestrated the fraudulent claims-filing scheme. Lai and his accomplices purportedly purchased vehicles, obtained insurance policies on the vehicles and staged non-injury accidents with them. Lai and his accomplices would then allegedly file multiple claims with insurance companies. They commonly reported that the insured was traveling on a two-lane road in San Diego County when they were involved in a hit and run collision, or that they hit a fixed object, CDI said. Lai and his accomplices endorsed and deposited claims checks from insurance companies into different bank accounts in an attempt to avoid detection, CDI said.

The CDI investigation also revealed that insurance claims were pursued by Lai and his accomplices until insurance companies began to question the legitimacy of the claim or opened an investigation. When that occurred, the questionable claim was withdrawn.

The investigation was conducted by the California Department of Insurance Fraud Division, California Highway Patrol, San Diego County District Attorney’s Office and the National Insurance Crime Bureau. The case was prosecuted by the San Diego County District Attorney’s Office.

Topics California