Argus West received a referral from a client for a possible premium fraud case against a janitorial company with a very large additional premium owed. After receipt of the referral our SIU team jumped headfirst into the investigation and found the following RED FLAGS:

1.    Insured had previously held a policy under a different company name.

2.    Policy payroll estimate was $50k but audit found $1.5 million.

3.    Insured had significant 1099 labor for which they did not have any license or COI.

4.    Prior policy was non-renewed due to non-compliance with audit and high ex-mod.

5.    Insured changed address on policy to reflect an address from a prior policy just days       after inception.

Once the material evidence was discovered our SIU investigator filed an FD-1 with law enforcement. Shortly after filing the FD-1 Argus West received a demand letter from the San Bernardino DA’s Office requesting all documentation, calling on our team to prepare and send over a detailed prosecution package.

The insured was arraigned and initially pled not guilty to all charges which led to San Bernardino DA prosecuting the case. During the trial the insured ended up pleading guilty to one felony count of insurance fraud, one felony count of white-collar enhancement, and was sentenced to two years formal probation and ordered to pay over $670,000.00 in restitution to our client!