Former California Agent Arrested On 90 Counts of Insurance Fraud

Former insurance broker Karen Marie Dondanville, 53, of Mission Viejo, Calif., was arrested on 90 felony counts including grand theft, insurance fraud, financial elder abuse, and forgery for allegedly collecting premiums and failing to place insurance coverage for her customers resulting in $183,047 in stolen premium payments from 32 victims over the span of eight years.

The California Department of Insurance received multiple consumer complaints against Dondanville while she was doing business as Streamline Insurance Services and Broadstreet Insurance Services. Dondanville allegedly attempted to cover up the theft by providing clients with fraudulent proof of insurance documents. She also allegedly transacted insurance without a license.

Dondanville’s alleged fraudulent actions reportedly resulted in numerous policies cancelling for nonpayment. Dondanville also reportedly submitted fraudulent documents to insurers to divert premium refunds to herself.

An CDI investigation by reportedly revealed in one instance, Dondanville created fraudulent insurance documents for her client indicating that a homeowners policy cost $2,800, when the true cost was less than $900. Dondanville allegedly collected the $2,800 premium payment, but remitted less than $400 to the insurance company, causing the consumer’s policy to be canceled for nonpayment, leaving them unknowingly uninsured.

One consumer reportedly filed a claim and discovered Dondanville issued a fake insurance document, leaving a property uninsured and resulting in $100,000 in uncovered losses.

The CDI issued two cease and desist orders against Dondanville after receiving complaints from consumers who purchased insurance from Dondanville through their mortgage company, even after the CDI revoked her license on Nov. 6, 2019.

On January 11, the CDI adopted an administrative law judge’s proposed decision, which affirmed the department’s cease and desist Orders and ordered Dondanville to pay a penalty of $20,000 within 90 days for her unlawful insurance transactions and fraud.

The Orange County District Attorney’s office, which is prosecuting the case, is seeking restitution for the victims.

Topics California Fraud Agencies