OC insurance agent defrauds businesses of $2.5m

A Californian insurance agent has been arrested for defrauding 18 business owners of more than $2.5m, which they believed was paying for insurance policies for their businesses.

Between June 2003 and November 2007, Medina is accused of operating Prompt Insurance Agency in Newport Beach.

The defendant is accused of collecting more than $2.5 million from 18 business owners under the pretense of securing workers compensation and general liability insurance policies for them.

Medina is accused of failing to take out insurance policies for many of the businesses and charging the victims more than the stated premiums.

As a result of Medina’s failure to take out insurance policies for some of the businesses, several business owners and employees suffered losses that should have been covered by insurance.

The defendant is also accused of failing to file more than $230,000 in taxes.

“Insurance fraud cannot be tolerated and we will continue working with our local law enforcement partners to bring these alleged perpetrators to justice.

The Department of Insurance (DOI) began investigating this case when an insurance company filed a report after finding a discrepancy in a financed policy taken out through Prompt Insurance Agency.

Orange County District Attorney Tony Rackauckas. ‘This case shows how much damage a single dishonest agent can cause, not only to hard working business owners, but to taxpayers who are forced to absorb the cost of fraud.’

Insurance Commissioner Steve Poizner, added: ‘Insurance fraud cannot be tolerated and we will continue working with our local law enforcement partners to bring these alleged perpetrators to justice.’

Medina’s wife, Vanessa Chaverri, was also arrested.

Medina and Chaverri are expected to be arraigned Thursday, April 24, 2008 at the Central Justice Center, Santa Ana.