A former California insurance agent has been sentenced to a year in prison for stealing more than $100,000 in insurance premiums and investment funds from 10 victims.
Frederick Donald Rollins, 42, pleaded guilty to one count of grand theft, two counts of securities fraud and an aggravated white-collar crime enhancement, according to the California Department of Insurance. In addition to his prison term, Rollins must pay $100,363 in restitution to his victims.
The California Department of Insurance launched an investigation into Rollins after receiving multiple complaints – including one from an insurance carrier after a company attempted to file a claim for an injured employee under a non-existent policy. A business owner also complained after discovering they had no actual workers’ compensation or liability coverage.
The investigation revealed that Rollins collected premium payments from several clients but didn’t actually place coverage with any carrier. Even after leaving the insurance agency where he’d worked, Rollins continued to sell phony policies under a corporation he registered in Nevada but failed to license in California.
The investigation found that more than $20,000 in premium payments Rollins collected from his victims, made payable either directly to him or to his company, were spent on his own personal expenses. He issued fake certificates of insurance in order to cover his tracks.
Rollins also allegedly presented himself as a registered stockbroker and accepted money from several victims who thought they were making investments. He collected almost $80,000 from various victims under the guise of investing their money in stocks, the California Department of Insurance said.
“Many people make the mistake of thinking insurance fraud is a victimless white-collar crime,” Insurance Commissioner Dave Jones said. “This agent left his clients at great financial risk when he failed to secure their policies, leaving them without the coverage they paid for.”