Former insurance agents Ali Kakande, 37, and Sulaiman Lutale, 35, were arrested on multiple felony counts of insurance fraud, identity theft, money laundering, grand theft, and forgery after allegedly falsifying life insurance applications to collect over $300,000 in unearned commissions.
“I have zero tolerance for dishonest agents who rip off insurers or consumers for their own financial gain,” said Insurance Commissioner Dave Jones. “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. Agents like these tarnish the reputation of the California insurance industry.”
An investigation by the California Department of Insurance and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) alleged that prior to either Kakande or Lutale becoming licensed agents, the duo submitted approximately 70 fraudulent life insurance policy applications to various life insurance carriers under another licensee’s agent appointments. For these fraudulent applications Lutale collected over $81,000 in unearned commissions.
In 2012, they both became licensed agents and continued their scheme submitting an additional 89 life insurance policy applications from 2012 to 2014 and collecting more than $138,000 in unearned commissions. After they were no longer able to successfully submit new business under their own licenses, they continued their scheme by using licenses from at least three other licensees to submit over 70 additional fraudulent applications and collect more than $90,000 in unearned commissions.
“Fraud schemes like the one uncovered in this case result in billions of dollars in losses every year in this country and cause incalculable heartache and financial harm to law-abiding consumers,” said Joseph Macias, special agent in charge for HSI Los Angeles. “HSI is committed to working with its law enforcement partners to pursue such cases aggressively – ensuring those who brazenly enrich themselves through fraud and identify theft are held accountable for their crimes.”
To obtain personal information for the fraudulent applications, investigators allege Kakande and Lutale recruited applicants by paying them $50 to $200 and promising that they would receive free life insurance policies. Other applicants were victims of identity theft and unaware that life insurance policies had been issued in their names.
Life insurance policy applications were also submitted with Kakande and Lutale as the purported policyholders. The applications submitted to the insurance carriers contained misrepresentations and fabricated information, including false occupations, income, net worth or beneficiary information. Some of the applications also contained forged signatures of the alleged applicants.
The investigation also showed that premium payments were generally not paid by the applicants, but instead paid from accounts owned by Kakande or Lutale, or from accounts opened by other individuals who assisted them in carrying out the advance commission scheme.
Kakande was booked into Orange County Central Jail by CDI Fraud Detectives and bail was set at $470,000. Lutale was booked into Los Angeles County Jail by CDI Fraud Detectives and Homeland Security Agents and bail was set at $370,000. The Los Angeles County District Attorney’s Office is prosecuting the case under the California Department of Insurance’s Life and Annuity Consumer Protection Program.
Charges include 15 counts PC 487 (a) Grand Theft, 8 counts of 470 (d) and 473 (a) Forgery, 5 counts of PC 186.10 (a) Money Laundering, 3 counts of PC 530.5 (a) Identity Theft, and 15 counts of PC 550 (b) (2) Insurance Fraud.
CDI’s Life and Annuity Consumer Protection program (LACPP) provides grant funds for the prosecution of financial abuse in life insurance and annuity transactions.
The department encourages consumers who believe they may be a victim or that have any additional information to contact the Investigations Division at 714-712-7600.
Source: Kakensa Media