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Yahoo!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.”
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Insurance agent bilking customers? Nah, no way, got to be some sort of mistake here :) henry
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hank (anonymous profile)
February 6, 2009 at 7:40 a.m. (Suggest removal)
Henry I take offense to your post that ALL insurance agents are bilking customers. I have been a life health agent for 10 years and I can say that I have NEVER bilked or flipped business. Most agents DO the right thing!!!
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KarenR (anonymous profile)
February 6, 2009 at 8:06 a.m. (Suggest removal)
Karen, it was kind of a harsh blanket statement & I do acknowledege that.
Maybe my gripe is more w/ the companies rather than the agents.
But 1 has to wonder about the way insurance companies handle things.
After all, they're in the business of making $$$, nothing wrong w/ that in a free market enterprise society.
But when these companies delay or deny payments to their customers for reasons that amount to a breach of service it does give people reasons for resentment.
But that's a whole other tirade for another time. Most agents do the right thing, that is true.
This guy's actions, just as some insurance companies way of handling claims, is is a black eye to the good agents out to make a decent living :) henry
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hank (anonymous profile)
February 6, 2009 at 8:39 a.m. (Suggest removal)
150% commissions on first year premium, no first year cash values in your policy, lavish bonuses and trips are just a few examples. If you read your contract word for word you probably wouldn't buy the product the agent is trying to sell you. Do your homework...ask questions, you can purchase all these products direct from companies like USAA. Insurance agents and Realtor"s end up being your partner in you hard earned equity, the system needs an overhaul.
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lordleadbetter (anonymous profile)
February 6, 2009 at 12:01 p.m. (Suggest removal)
That guy was rogue and most agents aren't like that. Brown & Brown is a reputable company, been in business for a long time (look them up online). Agents are taught to protect their insured, to be their advocate and to provide top of the line service. Insurance companies are a seperate entity and the agent is just the go between. It is sad to hear what this guy did to people and I hope he gets the maximum sentence!
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santabarbarasand (anonymous profile)
February 6, 2009 at 9:40 p.m. (Suggest removal)
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