Get out of the closet and tell the world you're a life insurance agent!
SACRAMENTO, Calif., June 22 -- The California Department of Insurance issued the following news release:
Insurance Commissioner Dave Jones today announced that Landon Strauss, 35, of San Diego County was sentenced to three years felony probation for violating Penal Code Section 529, False Personation, to which he entered a plea of Nolo Contendere (no contest). Additionally, Strauss was ordered to pay restitution in the amount of $128,405.07 to the insurer and $10,000 to the CDI as a reimbursement for investigative costs.
According to investigators from the Valencia Investigations Office, in 2010 CDI received information from an insurer indicating that Strauss was selling stranger owned life insurance (STOLI). STOLI schemes involve investors soliciting the original purchase of the insurance for the sole purpose of an eventual sale to the policyholder which usually occurs two years after the policy is first taken out.
While operating out of his office in Beverly Hills, Strauss sold $20 million worth of life insurance to a senior citizen in San Diego County in or around May of 2006. In order to ensure that the life insurance would be approved and issued by the insurance company, Strauss fabricated information about the senior's assets and personal net worth. In furtherance of his scheme, Strauss stole the identity of an acquaintance and used it to create a phony CPA letter that he submitted to the insurer along with the senior's application. The CPA letter falsely stated that the senior was a multi-millionaire with a personal net worth of $44.9 million. As a result of this scheme, Strauss earned commissions totaling $128,405.07.
STOLI schemes have been outlawed in California since 2009, with the passage of SB 98. Under California law, any party purchasing life insurance must have an insurable interest in the person being insured. If there is no insurable interest, the insurer has a basis for declaring the policy void. Simply put, an "insurable interest" exists where the owner of the policy is closely related to the insured, or otherwise has a financial interest in the continued life of the insured. One cannot take out a life insurance policy on a perfect stranger. In addition, California law prohibits executing insurance policies as "wagers" on people's lives. California law regulating life settlement transactions recognizes these risks, and has outlawed STOLI transactions entirely.
Strauss agreed to a stipulation that he will not be involved in the business of insurance as an agent or broker or in any fiduciary capacity within the insurance business. Strauss has not been licensed to sell insurance since October of 2010.
This case was prosecuted by the Los Angeles County District Attorney's Office.
TNS 23SQ 120623-JF78-3921996 StaffFurigay