Calif. Theft; Fraud Suspects Surrender

April 5, 2006

Insurance Commissioner John Garamendi announced the surrender of Wanda Cleveland, 49, Willie Cleveland, 50 (husband and wife) from Whittier; Farrell Cobbs, 42, of Victorville and his brother Wade Cobbs III, 44, of Los Angeles on March 22, 2006 for charges of falsifying dismemberment claims.

The surrender occurred at the Los Angles County Superior Court in response to a complaint filed by the California Attorney General’s Office. The defendants were charged with a total of 58 felony counts including insurance fraud, grand theft and tax fraud.

According to Department of Insurance (CDI) Investigators, this case began in July 2003 when a claims examiner at UNUM Insurance Company received a dismemberment claim from Willie Cleveland, indicating Cleveland accidentally amputated a thumb and forefinger while using a band saw. The examiner had recently approved payment for an eye loss claim Cleveland made as a result of a radiator cap exploding in his face. UNUM investigations discovered that the medical reports for the finger and eye loss claims were forgeries. In October of 2003, UNUM referred the case to the CDI’s Fraud Division.

“It is very disturbing to know that these types of scam artists are operating in our communities,” said Insurance Commissioner John Garamendi. “Would-be con artists should know that my department is out there everyday fighting this type of fraud. Together, with local law enforcement and prosecutors, we will continue to protect Californians – businesses and consumers alike – from falling prey to fraud abuse.”

The Fraud Division’s investigation revealed that the Cleveland married couple and Cobbs brothers purchased dismemberment policies from various insurance companies to make erroneous claims. The victim insurance companies include: UNUM Life Insurance Company, American Reliable Insurance Company, the Hartford (formerly CNA Insurance Company) and First Fortis Life Insurance Company. The complaint alleges that the total losses to the insurance companies were over $1.8 million.

On March 14, 2006, the state Attorney General’s Office filed charges including 58 felony counts and is prosecuting this case. The charges include insurance fraud, grand theft and tax fraud against Willie Cleveland, Wanda Cleveland and Farrell Cobbs. Charges of insurance fraud and grand theft were filed against Wade Cobbs III.

On March 29, 2006, Wade Cobbs and Wanda Cleveland were released without having to post bail. Farrell Cobbs and Willie Cleveland were also released without posting bail, but the court ordered both of them to wear electronic monitoring devices around their ankles to prevent escape. If convicted on all counts, Willie Cleveland faces 27 years imprisonment, Wanda Cleveland faces 21 years, Farrell Cobbs faces 19 years and Wade Cobbs III faces 5 years imprisonment. A preliminary hearing for the defendants is scheduled for May 25, 2006.

Special Agents from the State of California Franchise Tax Board and the Los Angeles Police Department’s Questioned Documents Unit were also involved with the investigation. Special Investigation Units from the victim insurance companies provided assistance during the CDI’s Fraud Unit investigation.

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