Unlicensed California Insurance Agent Arraigned in $1.4M Workers’ Comp Fraud Scheme

October 28, 2021

Unlicensed insurance agent Karyl Lynn Reed, 57, formerly of Cosa Mesa, Calif., was arraigned this week on multiple felony counts of grand theft, forgery, embezzlement, and aggravated white-collar crime after allegedly defrauding three victims of over $1.4 million.

Reed was arrested in Seabrook, Texas, and extradited to Orange County, earlier this month.

An investigation by the California Department of Insurance reportedly found that between 2012 and 2019, Reed acted as an insurance agent without a license and collected premiums for workers’ compensation insurance through her businesses, Envoy Business Partners and Allenn Specialty Group. She allegedly provided victims with fraudulent certificates of insurance, causing them to believe they had valid coverage when there was actually none.

The CDI investigation reportedly discovered Reed also operated a staffing company without valid workers’ comp coverage and personally adjusted and administered employee injury claims. She collected workers’ comp premiums and payroll, employer and employee taxes from victims, and provided them with falsified Certificates of Insurance as well leading them to believe they were covered when they were not, according to investigators.

It was reported that one victim did not have workers’ comp coverage for an employee who became injured. Another victim reportedly had requested an updated certificate of insurance from an insurer and was told no policy or coverage was in place and found out the policy number Reed had provided belonged to a policy for another business. Another reported victim discovered the money they were paying Reed to her staffing service was not being remitted to the insurance company.

This case is being prosecuted by the Major Fraud Unit of the Orange County District Attorney’s Office.

Topics California Agencies Workers' Compensation Fraud

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