4 Life Insurance Agents Accused in $1.9M Fake Policy Scam

Four Southern California life insurance agents have been arrested in connection with stealing $1.9 million in advance commissions by submitting fraudulent insurance applications, authorities said.

Mohammed Kakooza, 44, Margret Birabwa, 35, Michael C. Monday, 43, and Denis E. Osikol, 36, have pleaded not guilty to charges of theft, misrepresentation, money laundering and falsifying tax returns, authorities said.

Kakooza set up referral programs and paid life insurance applicants between $25 and $50 for referring family members or friends to sign up for life insurance coverage, according to a 38-count complaint filed by the Los Angeles District Attorney.

Some applicants were told they were applying for life insurance policies and Kakooza would contact them with premium payment information, authorities said.

In other cases, premium payments were not paid by the applicants but paid for from bank accounts owned by Kakooza, Birabwa or Osikol, or from accounts opened by other associates helping the alleged fraudsters, authorities said.

Applications were submitted with forged signatures without the applicants’ knowledge, and riddled with falsehoods pertaining to occupation, income, net worth and beneficiary information, authorities said.

In some cases, applicants were unaware the life insurance policies they applied for were ever in force, authorities said.

Many of the policies that were successfully processed and placed, however, eventually lapsed due to nonpayment of premiums, authorities said.

In all, Osikol and Monday submitted more than 600 fraudulent applications to more than a dozen life insurers between May 2013 and July 2017, authorities said.

A joint investigation by the California Department of Insurance and U.S. Immigration and Customs Enforcement's Homeland Security Investigations led to the March 20 arrests.

A preliminary hearing is set for April 4.

If found guilty, defendants each face between 16 and 25 years in jail, authorities said.

“I have zero tolerance for dishonest agents who scam consumers and insurers,” said California Insurance Commissioner Dave Jones.

“Arresting the individuals behind this complex fraud conspiracy is another win for the department and our law enforcement partners,” Jones said a news release. “It should serve as a warning to any agent or broker breaking the law—we will investigate and prosecute you for your crimes."

As of late Wednesday, all four were being held in the Los Angeles County Central Jail.

A Complex Scheme Machine

More than $1.2 million in commissions was deposited into a bank account owned by Birabwa, nearly $700,000 deposited into a bank account owned by Kakooza, and more than $12,000 was deposited into a bank account owned by Osikol, authorities said.

Birabwa and Kakooza received the bulk of the commissions issued by the insurers, but Monday and Osikol also received money directly from Kakooza and Birabwa, authorities said.

In addition, Birabwa falsified income tax returns pertaining to the Crescent Financial & Insurance Agency in Glendale, Calif.

Insurers Americo Financial Life and Insurance, Fidelity & Guaranty Life, Transamerica, PHL Variable Life, Foresters Life, American General Life, American National, North American, American Amicable Life, Ohio National Life, Principal National Life, Protective Life, Security Mutual of New York, fell victim to the scheme, according to the complaint.

Companies were swindled out of as little as $2,000 and as much as $533,000.

“Fraud schemes like this one uncovered in this case result in billions of dollars in losses every year in this country and cause heartache and financial heartache to law-abiding consumers,” said Joseph Macias, special agent in charge for Homeland Security Investigations.

Bail for Kakooza was reduced to $100,000 from $550,000, authorities said.

Bail for Birabwa was set at $475,000, for Monday at $500,00, and for Osikol at $500,000.

Insurance licenses for each of the alleged fraudsters are inactive, according to the California Department of Insurance database.

A preliminary hearing is set for April 4.

If found guilty, defendants each face between 16 and 25 years in jail, authorities said.

“I have zero tolerance for dishonest agents who scam consumers and insurers,” said California Insurance Commissioner Dave Jones.

“Arresting the individuals behind this complex fraud conspiracy is another win for the department and our law enforcement partners,” Jones said a news release. “It should serve as a warning to any agent or broker breaking the law—we will investigate and prosecute you for your crimes."

As of late Wednesday, all four were being held in the Los Angeles County Central Jail.

Calls to the defendants’ respective attorneys were not returned late Wednesday.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].