View this article online: https://www.claimsjournal.com/news/west/2004/04/26/41466.htm
Richard W. Peterson, 63, of San Francisco, a former insurance broker/agent, was arrested April 19th at Miami International Airport on federal fraud charges for allegedly selling approximately $4 million of fake insurance policies allegedly underwritten by Lloyd’s of London (Lloyd’s). Peterson remains in federal custody in Florida until his appearance can be arranged in the Southern District of New York.
Peterson, also known as “Robert James,” allegedly issued more than 350 fake policies to California restaurants, bars and taverns. Nearly 70 of these purported Lloyd’s policies were obtained through a single California wholesale insurance brokerage.
Peterson was taken into custody by agents of the United States Postal Inspection Service (USPIS) after federal authorities in Miami were notified by investigators from the California Department of Insurance’s Investigation Division (CDI) and USPIS agents from New York and San Francisco. Investigators learned Peterson left for Florida after they went to arrest him at his San Francisco home early April 19.
“Fiscal predators make all of us pay for their illegal activity,” said California Insurance Commissioner John Garamendi. “Selling fake insurance policies exposes unsuspecting business people, many who operate ‘mom-and-pop’ restaurants, to tremendous liability. I’d like to thank the U.S. Attorney’s Office and the U.S. Postal Inspection Service for their exceptional work in this case and the spirit of collaboration in which we all pursued this scam artist.”
The complaint, unsealed this week in a Manhattan federal court, charges Peterson with conspiracy to commit wire and mail fraud; engaging in the business of insurance after having been convicted of a federal felony; and use of a fictitious name in a scheme to defraud. If convicted, Peterson faces a maximum sentence of five years in prison on each of the three counts.
Peterson used the names United Restaurant Services Corporation, United Restaurant Services Cooperative, United Restaurant Insurance Services and California Restaurant Specialty Cooperative (collectively known as URSC). With offices in San Francisco, Las Vegas and Avondale, Ariz., fraudulent commercial liability policies were marketed by URSC to restaurants, bars and taverns throughout California through licensed insurance brokers. The policies indicated coverage had been obtained from “underwriters at Lloyd’s.” Authorities at Lloyd’s, however, advised CDI investigators that Lloyd’s did not receive any applications for insurance or any premium funds from the bogus policies.
Once the fraud was uncovered, CDI and Lloyd’s advised victims to contact their insurance brokers and obtain new coverage.
CDI investigators worked closely with the USPIS’ Manhattan office and the Office of the United States Attorney, Southern District, to obtain the federal complaint.
In 2001, Peterson was convicted of bankruptcy fraud, a felony, in the Northern District of California.
In 1999, the California Department of Insurance revoked Peterson’s insurance license for stealing insureds’ money by illegally raising their premiums then fraudulently changing their policies to conceal the theft.
Because this investigation is ongoing, CDI urges any clients who may have purchased insurance from Peterson and/or URSC and have not already contacted CDI to call the department’s Consumer Hotline at 1-800-927-HELP.