Calif. Broker Arrested on Seven Counts of Grand Theft

May 4, 2005

Insurance broker Robert Stephen Rice, 56, was arrested on seven felony counts of grand theft at his home in Thousand Oaks, Calif., by the California Department of Insurance (CDI) Fraud Division.

The arrest is the result of an investigation by CDI’s Investigation Division. The Van Nuys District Attorney’s Office filed a felony complaint and arrest warrant against suspect Rice on April 11, 2005. Rice was booked at the Ventura County Sheriff’s Department and bail has been set at $245,500.

“This broker put his unsuspecting clients in an immensely risky situation,” said Insurance Commissioner John Garamendi. “By collecting premiums and then providing phony documents as proof of insurance, his clients were vulnerable to huge potential losses.”

According to investigators, CDI received several complaints from Rice’s insurance clients alleging that they had paid Rice thousands of dollars in insurance premium, but had not received policies or refunds. The investigation revealed during a period of November 2001 through February 2004, Rice accepted more than $262,666 in insurance premium monies from seven victims for general liability/construction wrap policies and commercial apartment building policies. Construction wrap policies cover general contractors, subcontractors, architects, etc., under one policy for a period of ten years after a project is completed for any construction defect problems that may arise.

Rice did not send the premium monies he accepted from the victims to the insurance carriers. Instead Rice created bogus documents and forged signatures of insurance company executives and presented the bogus documents to the victims as evidence of insurance. However, the policies did not exist, which put the victims at risk.

From the Insurance Journal