Alleged Santa Rosa fraud scheme, now with criminal charges, reflects worsening wildfire and insurance crises

After the 2019 and 2020 wildfires, Vallen Cooper and her son Chad handled insurance claims worth millions of dollars for smoke and ash cleanup at the Villa Rosa condominium complex in Santa Rosa and other properties they managed.

Chad Cooper’s company, Accurate Janitorial & Maintenance, which he ran with his fiancee, handled the work.

The problem was, according to homeowners associations for those properties, they didn’t know the claims were being filed on their behalf and were unaware that any work was done.

The dispute sparked lawsuits and a countersuit involving the HOAs, insurance carriers and the Coopers, the last of which was settled in September.

But now, the Sonoma County District Attorney’s Office has charged Vallen Cooper with three felony counts of insurance fraud and Chad with two. Both were hit with “aggravated white collar crime” enhancements, which can be charged when the alleged fraud involves more than $500,000.

Arrest warrants were issued on Oct. 23. In the warrant affidavits, a fraud specialist for the California Department of Insurance stated that based on a review of claims and interviews with past and present HOA board members, the Coopers’ Commonwealth Property Management company filed 17 fraudulent insurance claims that paid Chad Cooper’s maintenance company close to $2 million. The arrest warrants said Chad and Vallen are believed to be living in Arizona.

The Coopers, through their attorneys and in court filings, deny any wrongdoing and say it was the insurance companies that turned the tables on them in an effort to deny legitimate claims.

Fundamentally, the case reflects the messy ways people continue to be entangled in the fallout from years of historic wildfires and an ensuing insurance crisis.

“It’s bad enough that people are suffering because of the fires and still trying to get money back for losses, and then to have situations like this,” said Daniel Ellecamp, who was a member of the Villa Rosa Homeowners Association at the time.

Lewis Warren of Santa Rosa-based law firm Abbey, Weitzenberg, Warren & Emery, who defended the Coopers in a civil lawsuit filed by Travelers Property Casualty Co. of America, one of the cases that settled, said the charges came as a surprise.

“Frankly I’m utterly astounded that we have criminal charges being filed in light of what I know about this case and what I thought was putting this whole matter to rest,” Warren said. “We were going to defend the lawsuit very vigorously, but unfortunately, when you’re dealing with what was a very large, well-heeled Los Angeles law firm and Travelers funding that effort, we recognized it was going to cost many hundreds of thousands of dollars, so an economic decision was made, and Travelers accepted way, way less than they had alleged.”

Assistant District Attorney Brian Staebell said the Sonoma County District Attorney’s Office is limited in what it can say publicly about a pending case. However, he said, the California Department of Insurance provided investigative reports to the local office for criminal charge consideration in August. The state’s “investigation was in the works, to the best of our knowledge, for approximately 18 to 24 months,” Staebell said.

A spokesperson for the Department of Insurance said its investigation and the criminal charges are separate from past civil cases. “There are a number of ways our team receives referrals about suspected fraud, including from insurance companies, consumers and partner agencies, to name just a few,” Senior Deputy Press Secretary Madison Voss said. The department will be supporting the District Attorney’s Office throughout the case.

According to a lawsuit filed by the Villa Rosa Homeowners Association in 2021, two insurance claims for power-washing worth a total of $741,698 went virtually unnoticed until an insurance broker reached out after Travelers cited the payouts in deciding not to renew Villa Rosa’s insurance in 2020. That led to a scramble that resulted in more expensive insurance with less coverage.

Annual insurance premiums for the 240-unit complex shot up from roughly $45,000 to $285,000, costs that would have to be covered by condo owners or their renters.

When Villa Rosa homeowners and residents found out, “we were devastated,” said Ellecamp, who rented out three units he owned in the complex. It would mean significant increases in dues to cover a sixfold premium price increase and worse protection in case of future losses.

“These are lower middle-income families that live in these units, working-class people or retired people, or if they're rental units, they're affordable rental units. Many can’t afford sky rocketing insurance rates,” he said.

At the time, they were in the dark about the saga that led them there, which kicked off at a November 2019 Villa Rosa Homeowners Association board of directors meeting.

“In response to the recent fire, the insurance company sent adjusters out to review the Association for possible smoke damage,” meeting minutes of a maintenance report by Chad noted. “Due to the smoke residue found on the surface of the buildings during their inspection they are having the exterior of the units cleaned by (Accurate Maintenance & Janitorial). There will be no cost to the Association as the insurance company is paying for the work to be done. AMJ will be paid the amount the insurance company pays out/allocates on a per building basis.”

A similar report from Chad appeared in the Sept. 22, 2020, board meeting minutes, this time in the wake of the Walbridge Fire and other 2020 blazes.

There was no follow-up or mention of official claims being filed or updates on the cleaning process, Villa Rosa’s lawsuit said. Income and expense reports to the board from Vallen Cooper’s company, Commonwealth Property Management also don’t list the incoming claim checks or outgoing payments to the maintenance company. Ellecamp said the usual process for major or even more minor projects on the property included updates, contract bids, invoices and payment authorizations by the board all along the way.

Meanwhile, two weeks before the September 2020 board meeting, Villa Rosa’s insurance broker sent a message to Vallen. “I received your voicemail requesting to file smoke damage claims,” she said in a Sept. 9 email. “We will certainly proceed with filing these claims as requested, but I wanted to caution the Board against a potential nonrenewal in addition to premium increases associated with unfavorable loss ratios.” The broker said with board confirmation, however, the agency would move forward with seven new claims for Villa Rosa and other properties.

Vallen wrote back a few hours later with the go-ahead: “Thank you so much for your continued professionalism during this trying and difficult time.”

Three weeks later, on Sept. 30, Travelers sent a notice of nonrenewal to the Villa Rosa Homeowners Association, care of Commonwealth Property Management.

“Your policy had a loss ratio of over 400% over the past 3 years,” the notice said, citing the two claims worth roughly $743,000. “Due to this poor loss ratio, we are non-renewing your policy effective 12/10/2020.”

But, Villa Rosa’s lawsuit states that the association had no idea why they were dropped, and were told only by Vallen that Travelers “was no longer interested in writing the property coverage.”

That triggered the hunt for alternative insurance in a market where insurers have become increasingly resistant to writing policies, especially in wildfire-prone areas. “We are trying to find replacement coverage, but the market response has been unfavorable thus far,” Villa Rosa’s broker wrote to Vallen on Nov. 16.

Five months after Villa Rosa sued the Coopers, Travelers filed its own lawsuit against the Coopers. The August 2021 suit alleged the Coopers filed 11 fraudulent claims worth $2.1 million on behalf of seven homeowners associations. Travelers only paid out about half that amount because several claims were withdrawn, but it sought more than $6 million in damages.

Attorneys for the Coopers argued in response to those suits that in the wake of the massive 2019 Kincade Fire, all Vallen did was report smoke and ash damage.

The insurance companies took it from there, sending out adjusters who came up with estimates. Overwhelmed remediation businesses were booked months out at the time, so Chad stepped in to do the work, which the Coopers insist was completed and confirmed in witness depositions and other evidence in the civil litigation.

With a new round of blazes in 2020, Vallen’s reports of more damage were met with questions about the validity of the claims and pressure on homeowners associations, the Coopers claimed. Under threat by Travelers of increasing premiums or nonrenewals, which the Coopers say would have happened anyway, most claims were withdrawn.

“All of these actions were performed under the reprehensible and despicable motive of avoiding payment of covered claims,” damaging Commonwealth Property Management’s business in the process, a 2023 filing said.

Travelers did not respond to requests for comment, and neither did George Petersen Insurance Agency, which acted as the insurance broker and go-between for the homeowners’ associations. Vallen sued George Petersen and one of its agents for defamation following the Travelers case. That case was dismissed.

Villa Rosa’s case was resolved in 2023. With the much larger Travelers lawsuit in the picture, the homeowners’ association voluntarily dismissed its own case, settling for $30,000 from the Coopers. It was a fraction of what was initially sought, on top of attorney’s fees and other costs, but the association also worked out a deal with Travelers to have its original insurance policy terms reinstated.

Stuck between the insurance giant and the Coopers, it seemed like the best possible result given the circumstances, Ellecamp said, “but it was a pretty painful and time-consuming process.”

The Travelers lawsuit settled for a confidential amount in September, a month before the criminal charges were filed.

The Coopers’ criminal attorney, Chris Andrian of Andrian & Gallenson, said that poor management decisions or advice, which he did not concede, still don’t necessarily amount to criminal conduct.

“Whether you should have or ought to doesn’t just make it a crime,” he said. Andrian said he is reviewing discovery in the case ahead of a January hearing. The realm of insurance fraud can be fuzzy, especially against the backdrop of the last several years where residents and insurers and everyone in between have struggled to cope with escalating disasters, Andrian said. “I’m confident that when all the dust settles here, and we have a chance to sit down with the prosecutors, I think our clients will be exonerated.”

Ellecamp sold his last condo at Villa Rosa about a year ago in part because of everything that unfolded. Although the complex avoided a worst-case fate, Ellecamp said he could never have imagined getting caught up in a situation like this. He worries for others who could in the future and an outward ripple of consequences in an area still plagued by the effects of years-old fires, not to mention those still to come.

“Not only did it hurt Villa Rosa and the other HOAs impacted,” he said, “but what happens, then, if other insurance companies redline that area. You could have a black mark if you’re down the road.”

“In Your Corner” is a column that puts watchdog reporting to work for the community. If you have a concern, a tip, or a hunch, you can reach “In Your Corner” Columnist Marisa Endicott at 707-521-5470 or [email protected]. On X (formerly Twitter) @InYourCornerTPD and Facebook @InYourCornerTPD.

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