News: 2009 Press Release
For Release: February 2, 2009
Media Calls Only: 916-492-3566
Commissioner Poizner Announces So. California Insurance Agent Charged with $1.3 Million Grand Theft
Insurance Commissioner Steve Poizner today announced that David Abraham, 48, of Santa Barbara, was charged on January 30 with one felony count of grand theft for allegedly stealing more than $1.3 million. If convicted, Abraham could face up to five years in prison.
"I want to make this crystal clear to anyone who attempts to take advantage of California consumers - we will find you, and we will prosecute you," said Commissioner Poizner. "Scamming unsuspecting people out of their hard-earned money is unacceptable, and the Department of Insurance will continue to crack down on fraud perpetrators."
Abraham, a licensed life insurance agent and former employee of Brown & Brown Insurance in Santa Barbara, is charged with twisting and churning annuity policies of his clients, many of whom are senior citizens. After selling a client an annuity policy, Abraham would allegedly wait until a policy was at least one year old so that he would retain a commission, and then transfer the annuity policy to another company. The transfer would result in a sizeable commission for Abraham, while the policyholders faced surrender charges of more than 10% of the principal.
He allegedly repeated this scheme until he had made more than $1.3 million in commission payments. When asked about the surrender charges by clients, Abraham purportedly told them that the new companies would pay bonuses to make up for the surrender penalties. The unsuspecting clients were not informed that they needed to maintain their annuities for a specified period of time in order to realize the bonuses. Abraham's clients suffered surrender penalties amounting to $1.9 million as a result of his alleged actions, while he made more than $1.3 million in commissions.
CDI investigators also discovered that Abraham allegedly changed his clients' mailing addresses to his home address on the new annuity policies, in order to conceal his actions. It is also alleged that Abraham fabricated policy statements with inaccurate figures using the original annuity company letterhead.
The Santa Barbara County District Attorney's Office is prosecuting this case.
Commissioner Poizner oversees sixteen CDI Enforcement Branch regional offices throughout the state. Close to 1900 insurance fraud-related arrests have been made by the Department of Insurance's enforcement division since Commissioner Poizner took office in 2007 - more arrests than have been made during any other two year period, under any previous insurance commissioner.
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