California Agent Convicted For Taking Out Loans In Clients’ Name

May 14--UPLAND -- A local man pleaded guilty to bank and tax fraud in a scheme that caused nearly $6 million in losses for a West Covina bank.

Derek Richard Brewart, 53, of Upland was sentenced Wednesday to serve a year and a day in federal prison, according to a U.S. Attorney's office news release.

In addition to the prison term, Brewart was ordered to pay $5,926,430 in restitution to Universal Bank of West Covina. He was also ordered to work with the Internal Revenue Service to determine how much he owes in unpaid taxes.

In February 2015, federal prosecutors charged Brewart with bank fraud and filing a false tax return. Brewart owned the Hamilton Brewart Insurance Agency and secured bank loans in his clients' names without their knowledge, according to federal prosecutors.

Over the course of about four years, Brewart submitted fraudulent loan applications to Universal Bank to secure premium financing loans, the release states.

"This defendant used his insurance expertise to engage in a scheme that violated the trust given to him as a licensed agent and cost a local bank nearly $6 million," United States Attorney Eileen M. Decker said in a statement. "His clients trusted him to protect their assets, but he repaid them by placing their assets at risk for his own financial gain."

Prosecutors also said Brewart took premium payments from some clients and never obtained insurance for those clients.

As part of his plea deal, Brewart also admitted he failed to report nearly $800,000 to the IRS.

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