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.