Five arrested for ripping off insurers for more than $600k
News: 2014 Press Release
ORANGE COUNTY and SAN DIEGO, Calif. - California Department of Insurance detectives arrested Tyler Wilkinson, 37; Ian Frisch, 31; Ruben Banuelos, 63; Edward, 71, and Maxine Putnam, 68, on multiple felony charges of grand theft. The five suspects are accused of falsifying life insurance applications to collect more than $600,000 in commissions.
"Arresting the individuals behind this complex fraud conspiracy is another success for the department, insurers and all California insurance consumers," said Insurance Commissioner Dave Jones. "Insurance crime is an expensive drain on our economy, resulting in higher costs for all consumers."
The investigation revealed a complex and lengthy scheme where Wilkinson would target victims through the use of cappers (people paid to recruit policy applicants) and finders to locate potential policyholders. Wilkinson would then submit the fraudulent application to insurers through Frisch, a former life insurance agent. The pair then profited by allowing the life and whole life policies to lapse after a year while retaining the commissions paid by the insurer for the initial policy application. Several insurers paid commissions totaling more than $600,000.
This scheme began with three complicit life insurance applicants. The Putnams and Banuelos knowingly made false statements on life insurance applications allegedly working in cahoots with Wilkinson and Frisch. The policies were then allowed to lapse after just one year while the individuals involved profited from commissions. In June 2014, Banuelos and the Putnam's were each charged with one felony count of grand theft, one count of great taking allegations.
This case was investigated by the California Department of Insurance, with assistance from California Department of Business Oversight, the Orange County District Attorney, and the Federal Bureau of Investigations. The criminal investigation is ongoing. The investigation and prosecution of this case is under CDI's Life and Annuity Consumer Protection Program (LACPP). LACPP provides grant funds to counties for the prosecution of financial abuse in life insurance and annuity product transactions.
- Wilkinson and Frisch were booked in the San Diego County Jail with bail set at $600,000 for both. Wilkinson and Frisch are being charged with four counts 487(a) PC Felony Grand Theft, along with the Aggravated White Collar Crime Enhancement 186.11 PC, and the Great Taking Allegation under 12022.6 PC.
- Banuelos and Mr. and Mrs. Putnam were booked at the Orange County Central jail -with bail set for Banuelos at $180,000 and $200,000 and $170,000 for Mr. and Mrs. Putnam, respectively. Banuelos and Mr. and Mrs. Putnam were charged June 23, 2014, by the Orange County District Attorney's office.The three are charged with one felony count each of 487(a) PC Felony Grand Theft, and one count each of the Great Taking Allegation under 12022.6 PC.
- In January 2014, Department of Insurance detectives arrested Morgan Laws, 84, of San Clemente for investment fraud and grand theft related to this case. Laws pled guilty to Grand Theft and unlicensed sales.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.