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.

Previous articleCommunication is Key
Next articleTypical Fraudster

Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.