2 Arrested In $1M Life Insurance Scam

LOS ANGELES, California, Sept. 25 -- The California Department of Insurance issued the following news release:

Peter Muh Kim, 39, of La Canada Flintridge, and his wife, Jin Kyung Kim, 35, were arrested today on three felony counts each of grand theft and three felony counts each of insurance fraud.

An investigation by the California Department of Insurance revealed that Peter Kim, a licensed insurance agent, allegedly sold two policies to his wife, Jin Kim, and falsely listed her as a niece and beneficiary of the insured. During the same time, Jin Kim purchased another life insurance policy for the same insured and falsely listed herself as the sister and beneficiary of the insured. The Kims allegedly misrepresented that Jin Kim was related to the insured in order to show insurable interest on the policies.

"To those contemplating insurance fraud, let this be an example that this crime is a felony," said Insurance Commissioner Dave Jones. "Arresting the individuals behind this life insurance fraud scheme is another win for the department and our law enforcement partners. It should serve as a warning to any agent or broker breaking the law--we will aggressively investigate allegations of wrongdoing and work with our district attorney partners to prosecute scam artists and dishonest insurance producers."

The Kims also allegedly failed to disclose the insured's initial diagnosis of a terminal illness to the insurance companies. The insured passed away in July 2014, and the insurance companies paid Jin Kim over $1 million in life insurance proceeds.

Peter Kim is currently booked at the Inmate Reception Center in Los Angeles while Jin Kim is booked at the Lynwood County Jail. Bail is set at $460,000 for each of them. Arraignment date is still pending.

This case is being prosecuted by the Los Angeles County District Attorney's Office and was filed under the Life and Annuity Consumer Protection Program (LACPP),which was established through Assembly Bill 2316 (Chan). The LACPP established a fund to be used exclusively for protecting consumers of life insurance and annuity products in the State of California by both the California Department of Insurance and local district attorneys.