By Emily Miller
Last week the California Department of Insurance arrested and charged Orange County insurance agent, Eric Lee, 64, with 20 felony counts of insurance fraud.
His charges included grand theft and allegedly providing false or misleading information to consumers during a scheme that nettled him more than $1.4 million in fraudulent commissions.
“It’s unfortunate that there are dishonest agents that violate their fiduciary responsibilities,” said Insurance Commissioner Dave Jones in a press release. “The Department of Insurance regulates more than 360,000 licensed agents and brokers who work hard to be professional and honest in their business practices.”
The Department of Insurance began its investigation of Lee in January 2011 after an audit revealed that many of Lee’s policies failed to have any premium payments after the first policy year.
Investigators believe Lee instructed policyholders to complete fraudulent applications with false or misleading information and insufficient financial means to pay for the insurance policies being written.
As a result, Lee received approximately $4,403,897 in fraudulently obtained commission payments between October 2009 and October 2010.
He is currently being prosecuted by the Orange County District Attorney’s Office with bail being set at $1,403,897 and must prove that bails funds are not from money obtained through his commission scheme.
Unfortunately, scenarios likes this one can happen to anyone at anytime, which means consumers should be exceptionally cautious when purchasing any time of insurance policy. The insurance industry can be a confusing topic for most people and this could leave them vulnerable to schemes and potential fraud.
If you or someone you know feel like you are being exposed to a potential insurance fraud scheme, it is vital that you contact insurance commissioner as soon as possible. The National Association of Insurance Commissioners (NAIC) provides an interactive map where consumers can locate their state’s insurance commissioner and their contact information.
