San Diego insurance agent convicted for embezzlement
Madison Voss January 16, 2014 11:02 AM
SAN DIEGO, Calif. - Insurance agent Steven Michael Spellane, 41, has been convicted on one felony count of grand theft and sentenced to 16 months in state prison for embezzling clients' insurance premium funds. Spellane was ordered to pay more than $32,400 in restitution to victims and make a donation to the California Department of Insurance Anti-Fraud fund.
A joint investigation between the California Department of Insurance and the San Diego County District Attorney's Office revealed that Spellane, doing business as Red Cover Insurance Services Inc., embezzled premium funds intended to purchase policies for the victims. Two individuals were targeted by Spellane, though the department is asking that anyone who had dealings with Spellane or his company check their policies and ensure they are current.
At least two clients gave Spellane checks for the policies, which Spellane then deposited into his personal account. Spellane then financed his clients' policies through less expensive premium finance companies without their knowledge. The victims were tipped off to the fraud when they were contacted by the finance institutions, which were canceling their policies due to non-receipt of monthly payments, because Spellane made only the initial premium finance payment.
The insurance licenses for Spellane and Red Cover Insurance Services has been revoked by the Department of Insurance.