Ex-Insurance Broker Arrested for Embezzling Policyholder Premiums

A former California insurance broker was arrested on May 30, 2014 by Los Angeles County Sheriff’s Department deputies on 11 felony counts of embezzlement and insurance code violations, after he allegedly duped multiple consumers into believing they were insured while he collected their premiums.

In March of 2010, the California Department of Insurance revoked John Monreal’s insurance license, listing 10 causes for discipline that included allegations Monreal was lacking integrity, conducting business in a dishonest manner, incompetency and diversion of fiduciary funds. A subsequent investigation found that Monreal continued to act as a broker at his business, the John Monreal Insurance Agency. Monreal issued checks to insurance carriers for the insurance policies that were eventually cancelled due to insufficient funds or partial payment.

As part of Monreal’s scheme he would allegedly convince his clients to pay the full annual premium on an insurance policy in exchange for receiving a reduced rate. He would further insist that checks for the policies be made payable to him. He provided victims with a certificate of insurance that indicated they were covered, but in reality, only a portion of the premium was remitted to the insurance carrier, leaving the insured without coverage. In many cases, the consumers only realized that they had been defrauded when a collection agency representing the insurance company contacted them. In total, Monreal collected $10,703 in premiums from his victims for automobile, home and earthquake policies.

Bail for Monreal was set at $120,000. The case is being prosecuted by the Los Angeles County District Attorney’s office.

Source: California Department of Insurance