There are many different ways that workers’ compensation fraud occurs. One of the most common instances is when an injured worker makes false statements or fakes an injury. Then there are some individuals who are receiving workers’ compensation benefits while working a second job. (That’s a no-no.) Medical providers tend to commit workers’ compensation fraud by overbilling or not providing services as claimed. Deceptive employers have been known to provide false information to an insurance company so their business can obtain reduced workers’ compensation policy rates. Today, we take a look at an Irvine, California licensed insurance agent who committed workers’ compensation fraud by pocketing his clients’ insurance premiums instead of providing coverage for on-the-job accidents. (Some of his victims were left stranded with nothing but a worthless certificate and a pending lawsuit from injured workers.)

The Californian had a few tricks up his sleeve and used a variety of schemes to convince contractors and small businesses, including minority-owned entities, to purchase their workers’ compensation premiums from him. Once his victims took the bait, he issued fake insurance papers in exchange for their money. (This left many of his clients at risk because they would be responsible for any work-related injuries.)

As you might guess, the fake insurance salesman used the money he collected from the premiums on himself instead of on a policy that would protect business owners and their employees. (Apparently, he went gambling with the extra cash, bought sports equipment and expensive designer clothes.)

Unfortunately, one of bogus insurance salesman’s victims was a construction company that was shocked to learn they didn’t have any workers’ compensation coverage after an injured employee filed a claim. Because the sham insurance policy was useless, the business incurred a significant loss. (The employer is working on negotiating a settlement with the injured employee.) Several victims were forced to pay increased premiums because of the gaps in coverage, even though they thought they were covered. Another victim had their contractor’s license suspended because they did not have a workers’ compensation policy.

The former licensed insurance agent from Irvine was charged with 10 felony counts including grand theft, insurance fraud and forgery for allegedly stealing $105,000 in insurance premiums from multiple business owners in his very misleading workers’ compensation fraud scheme that lasted for about 15 months. The former insurance agent surrendered to authorities at the Orange County Courthouse but was released after posting $100,000 in bail. Further research revealed that the 31-year-old man faces an enhanced sentence (harsher penalties for white-collar crime) under California Law because his crime involved a sum of over $100,000.

When businesses don’t have valid workers’ compensation policies in place, they are at risk of having huge financial losses or going under. This type of fraud drives up the premiums for others and makes it hard for companies to compete and be profitable. Thankfully, this man’s license for selling insurance has expired along with his fraudulent scheme.

Today’s “Fraud of the Day” is based on an article entitled, “Former California Insurance Agent Allegedly Faked Workers’ Comp Insurance,” published by Insurance Journal on February 25, 2019.  

Former California licensed insurance agent, Alan Amir Yousefi, 31, was charged with 10 felony counts including grand theft, insurance fraud and forgery, for allegedly stealing more than $105,000 in insurance premiums from several business owners.

Yousefi reportedly used a variety of schemes targeting contractors and small businesses to steal workers’ compensation premiums leaving his victims without insurance.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.