Two insurance brokers and two lawyers were arraigned Thursday, Aug. 1, on federal mail and wire fraud charges for allegedly inducing life insurance companies to issue about $50 million in policies to applicants who had no intention of paying premiums.
In return, the defendants got more than $1.6 million and the ability to sell the fraudulently obtained life insurance policies to investors, prosecutors said.
According to an indictment, the defendants — La Jolla brokers Byron Frisch and Kristian Giordano, and San Diego attorneys Kasra Sadr and Brenda Barrera — deceived insurance companies in a number of ways.
At first, they recruited elderly people to apply for "free" life insurance policies with $1 million death benefits, according to the indictment.
The defendants then lied on applications by omitting or falsifying the applicant's net worth, income or source of premium payments, according to the indictment.
The conspirators hid the fact they were paying all or part of the premiums and planned to resell the policies on the secondary market at a profit, the indictment stated.
Frisch and Giordano, both 36, were licensed insurance agents, and Sadr and Barrera, both 43, were lawyers who secretly funded the policy premiums, acted as trustees for applicants and controlled sales of policies on the secondary market.
The defendants were told to be in court Sept. 6 for a motions hearing.
—City News Service