Bay area agent arrested for allegedly selling bogus bonds and stealing $100,000 in premiums
News: 2015 Press Release
CONCORD, Calif. - Lars Hedegaard, 63, of Danville, was arrested on two felony counts of grand theft. As a licensed agent doing business as Westport &Associates Insurance Services Inc., Hedegaard allegedly issued 14 fraudulent bonds to contractors and collected $111,365 in insurance premiums, which he failed to send to the insurance company he transacted bonds for and instead used for personal expenses.
"Hedegaard's alleged illegal actions left contractors vulnerable to loss, which could have a devastating effect on their business," said Insurance Commissioner Dave Jones. "It is important to always check with your insurance company directly to make sure the policy you purchased is valid."
Between 2009 and 2010, while working in Concord, Hedegaard issued multiple unauthorized surety payment and performance bonds to two contractors. He continued to collect premiums on the bonds even after Insurance Company of the West (ICW) terminated his appointment to transact its bonds in August of 2010. Payment and performance bonds are surety bonds issued by insurance companies to protect owners of construction projects against contractor failure and to ensure suppliers and subcontractors are paid for work performed. ICW became aware of the fraudulent bonds when an insured asked for a return of premium as they completed a construction job under contract.
ICW notified Department of Insurance investigators when they discovered surety bonds were issued for multiple construction contracts without its approval and the insureds were paying premiums that ICW never received. ICW backed all of the fraudulently issued bonds and the contractors suffered no losses.
The Department of Insurance has begun the process of suspending Hedegaard's insurance license and encourages anyone that may have done business with Lars Hedegaard or Westport & Associates Insurance Services Inc. to contact the consumer hotline at 800-927-4357.
Hedegaard was booked into Contra Costa County Jail. The Contra Costa County District Attorney's office is prosecuting this case.
- Lars Hedegaard's booking photo is also available on the department's Flickr site: https://www.flickr.com/photos/ca_dept_insurance/16882098000/
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 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 $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.