As a result of an investigation conducted by the California Department of Insurance, Investigation Division (CDI), former Aliso Viejo insurance broker James Michael Gordon, 33, of North Miami Beach, Florida, surrendered himself on May 4, 2004, to Orange County authorities on a felony arrest warrant for two counts of grand theft.
The maximum sentence if convicted on both counts is three years, eight months in state prison. The case is being prosecuted by the Orange County District Attorney’s Office.
In 2001 and 2002, Gordon, doing business as Construction Bonding & Insurance Services, collected more than $38,000 in insurance premiums on the sale of bonds used to ensure the completion of nine construction and building projects throughout Southern California. Gordon issued bonds covering those projects but allegedly failed to forward the insurance premiums owed to the insurance companies. The two victimized companies, Great American Insurance Company and American Contractors Indemnity Company, were exposed to more than $1.6 million in potential liability on the projects they bonded without receiving any premiums.
Because the bonds were valid, the companies working on the projects were never exposed to liability beyond the normal course of business. Great American Insurance Company initially contacted CDI with its suspicions.
Gordon, who allowed his California insurance license to expire, was arraigned, and bail was set at $39,000. He was released on his own recognizance.
A pre-trial hearing is set for June 4, 2004.
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