A Santa Barbara man was arrested last month on a felony count of grand theft after he allegedly scammed several people out of a total of more than $1.3 million.
David Abraham, who used to work as a licensed life insurance agent at Santa Barbara’s Brown & Brown Insurance, would take annuity policies he sold, wait for a year or two to retain commission, and then transfer the policy to another company. This resulted in a higher commission for him and more charges for the policyholders, who sometimes had to face charges of more than 10 percent of their principal.
He allegedly explained to his customers that bonus payment would pay back the penalties, but the victims were never informed they needed to maintain their annuities for a specific amount of time before the bonuses kicked in. As a result, more than $1.9 million in penalties were stowed upon the victims while Abraham, 48, reeled in his profit.
He allegedly repeated this scam, often on the elderly, and changed his clients’ mailing addresses to his home address on their policies to hide his moves.
The case has now been handed over to the District Attorney’s office. If he is found guilty, 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 Steve Poizner, who has thrown his hat in the 2010 race for governor, in a statement. “Scamming unsuspecting people out of their hard-earned money is unacceptable, and the Department of Insurance will continue to crack down on fraud perpetrators.”