Two former insurance agents have been arrested and charged with multiple counts of theft and fraud in connection with a scheme to defraud nearly a dozen life insurers out of more than $300,000, authorities said.
The two agents, Ali Kakande, 37, and Sulaiman Lutale, 35, living in Southern California, submitted about 70 fraudulent life insurance policy applications under another agent’s name before themselves becoming licensed in 2012, authorities said.
The pair then submitted another 89 fraudulent life insurance applications between 2012 and 2014, authorities allege in a compliant.
Both insurance agents had their licenses expire in 2014, records show.
"I have zero tolerance for dishonest agents who rip off insurers or consumers for their own financial gain," said Insurance Commissioner Dave Jones, in a news release.
Kakande, who lists an address in the Westchester neighborhood of Los Angeles, was arrested April 11. Lutale, who lists an address in Canoga Park, in the San Fernando Valley, was arrested April 6.
Kakande was booked into Orange County Jail and bail was set at $400,000. Lutale was booked into Los Angeles Country Jail and bail set at $300,000, authorities said. He pleaded not guilty.
"The District Attorney's Office has made the decision to hold Mr. Lutale responsible for other people's conduct and fraudulent activities and we are highly disputing it," said Sharon Paris Babakhan, the attorney representing Lutale.
Lutale's biggest mistake was to allow anther person to do business under Lutale's license, she said in an email.
"Evidence will show and prove that Lutale did not write any of such applications and did not process them, that he did not engage in identity theft, nor money launder as it is alleged," Babakhan said.
A messages left Tuesday with Kakande's attorneys was not returned.
Both men face a June 13 preliminary hearing, the Los Angeles County District Attorney’s Office said.
Lutale is accused of collecting more than $81,000 in unearned commissions before obtaining his license in 2012, and both agents are accused of reaping $138,000 in unearned commissions over the two-year period ending in 2014, authorities said.
After the men were no longer able to submit new business under their own licenses, they used licenses from at least three other agents to submit more than 70 additional fraudulent applications and collect more than $90,000 in unearned commissions, authorities said.
Allianz Life Insurance, Americo Financial Life and Annuity, Lincoln National, North American Company for Health and Life, Protective Life, United of Omaha, Assurity Life, Foresters Life, Fidelity and Guaranty Life, Transamerica Life and American General were duped out of commissions, authorities alleged in a 55-count complaint.
In the spring of 2013, fraud managers at the insurance companies reported the discrepancies on the insurance application forms to authorities.
Kakande and Lutale recruited life insurance policy applicants by paying them $50 to $200 and promising that they would receive free life insurance policies, authorities said.
Other applicants were victims of identity theft and unaware that life insurance policies had been issued in their names.
Still other applications were submitted with Kakande and Lutale as the purported policyholders, but the applications were chock full of misrepresentations and false information related to occupations, income, net worth and beneficiary information, authorities said.
Life insurance premium payments were not paid by the applicants themselves, but instead paid from accounts owned by Kakande or Lutale, or from accounts opened by other individuals who helped them in carrying out the scheme, authorities said.
Kakande and Lutale each face multiple counts of grand theft, forgery, money laundering, identity theft and insurance fraud, according to the complaint.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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