Two attorneys and two insurance brokers have been charged with fraudulently causing life insurance companies to issue more than $50 million worth of policies to unqualified applicants who had no intention of paying the policy premiums.
In return, prosecutors alleged, the defendants obtained more than $1.6 million and the ability to sell the fraudulently obtained life insurance policies to investors.
According to the indictment, California attorneys Kasra Sadr and Brenda Barrera Merriles and insurance brokers Byron Frisch and Kristian Giordano employed multiple means to deceive the insurance companies. Initially, prosecutors allege, the defendants recruited elderly individuals to apply for “free” life insurance policies with million-dollar death benefits.
They then allegedly submitted fraudulent applications to the life insurance companies by intentionally omitting or falsifying the applicant’s net worth, income or source of premium payments. In addition, the conspirators concealed that they were paying all or part of the policy premiums and intended to sell the policies on the secondary market for large profits, according to the charges.
Prosecutors said the attorneys, from San Diego, secretly funded the policy premiums, acted as trustees for policy applicants, and controlled sales of the policies on the secondary market. Frisch and Giordano were licensed insurance agents who conducted business from their La Jolla, Calif., offices.
Here is a summary of the charges:
Count one: 18 U.S.C. §371 — conspiracy to commit mail fraud, wire fraud — all defendants. Maximum penalties: five years of imprisonment; $250,000 fine; $100 special assessment; three years of supervised release
Counts two to nine: 18 U.S.C. §1341 — mail fraud — all defendants. Maximum penalties per count: 20 years of imprisonment; $250,000 fine or twice the gross pecuniary gain or twice the pecuniary loss (whichever is greatest), $100 special assessment; three years of supervised release
Counts 10-23: 18 U.S.C. §1343 — wire fraud — all defendants. Maximum penalties per count: 20 years of imprisonment; $250,000 fine or twice the gross pecuniary gain or twice the pecuniary loss (whichever is greatest), $100 special assessment; three years of supervised release