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Southland business owners charged in decade-long underground economy fraud scheme

News: 2018 Press Release

For Release: August 27, 2018
Media Calls Only: 916-492-3566
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Southland business owners charged in decade-long underground economy fraud scheme
Pair faces more than 30 counts of insurance fraud

LOS ANGELES, Calif. — Brian Scott Krasnoff, 64, of Castaic and Lori Michelle Russum, 52, of Valencia were arrested and charged with more than 30 felony counts which include conspiracy to commit grand theft, grand theft, forgery, and failure to secure payment of compensation.

"Businesses operating in the underground economy have an unfair and illegal competitive advantage that undermines legitimate businesses and comes at the expense of workers and consumers," said Insurance Commissioner Dave Jones. "When businesses don't carry insurance they put homeowners and businesses that hire them at great financial risk if someone is injured on the job, leaving the homeowner or business liable."

Krasnoff worked as a subcontractor for maintenance companies throughout the country for over a decade. Krasnoff, owner and operator of Commercial Window Cleaning Co., allegedly conspired with Russum who owned a typing company to create false certificates of insurance. Krasnoff submitted the false certificates to these maintenance companies to secure jobs in Southern California where he performed maintenance services. These businesses believed Krasnoff was insured when in actuality he was not, and paid more than half a million dollars for his services.

"If you're hiring a professional to work on your home or property it's not enough to see an insurance certificate, you should always call the insurance company and confirm the policy is active," Jones added. "Taking this extra step should ensure your assets are protected and you are not liable in the event of an accident or injury."

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Media Notes:

  • Brian Krasnoff arrested by Los Angeles County Sheriff's Deputies on August 22, 2018.
  • Lori Russum surrendered herself to the Los Angeles Superior Court August 23, 2018.
  • This case is being prosecuted by the Los Angeles County District Attorney.

Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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