California Man Gets 70-Month Prison Term for Insurance Fraud

July 28, 2011

A federal judge in New Jersey has sentenced a California man to 70 months in prison for conspiring to sell bogus liability insurance policies.

Ronald Allen of North Hollywood, Calif., was convicted in December following a seven-day jury trial.

Prosecutors said Allen conspired with Houston-based insurance agent Gilbert Morgan to sell commercial liability policies to bar and nightclub owners around the country, including in New Jersey.

The policies were issued by a fictitious company created by Allen and never paid any claims.

Prosecutors said the men collected nearly $700,000 in premiums. In addition to the prison term, Allen was ordered to pay full restitution.

Morgan previously pleaded guilty and is awaiting sentencing.

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