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Financial Crimes
08/01/2018

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Former agents sentenced to a combined 10 years in life insurance scheme

Ordered to pay over $150,000 in restitution to insurance carriers

LOS ANGELES — Former insurance agents Ali Kakande, 38, and Sulaiman Lutale, 36, pleaded no contest to multiple felony counts of insurance fraud, grand theft, and forgery after falsifying life insurance applications to collect over $150,000 in unearned commissions.

Kakande was sentenced to six years in state prison and ordered to pay $105,129.90 in restitution. Lutale was sentenced to four years in state prison and ordered to pay $45,680.36 in restitution.

Kakande and Lutale were arrested in April 2017 after an investigation by the California Department of Insurance and U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) revealed Kakande and Lutale submitted over 200 fraudulent life insurance policy applications to various life insurance carriers to collect over $150,000 in unearned commissions.

The investigation found Kakande and Lutale conducted this advanced commission scheme by illegally using licenses from other licensees and obtaining personal information for the fraudulent applications by recruiting applicants with money and promises of free life insurance policies. They also stole identifying information and on some polices had themselves as the purported policyholders.

"To those contemplating insurance fraud, let this be an example that this crime is a felony," said California Insurance Commissioner Dave Jones. “This is a significant conviction and sentence on an insurance fraud case and it sends an important message to those who commit fraud – we will find you and you will be prosecuted. We are committed to working with our law enforcement partners to bring justice to those who rip off insurers and consumers for their own financial gain.”

The applications submitted to the insurance carriers contained misrepresentations and fabricated information, including false occupations, income, net worth or beneficiary information. Some of the applications also contained forged signatures of the alleged applicants. Generally, premium payments were not paid by the applicants, but instead paid from accounts owned by Kakande or Lutale, or from accounts opened by other individuals who assisted them in carrying out the scheme.

“Insurance fraud schemes disrupt the economy and cause law abiding citizens to pay more for their coverage,” said Joseph Macias, Special Agent in Charge for HSI Los Angeles. “HSI is committed to working with our law enforcement partners to bring down organized criminals that enrich themselves through fraud – with no concern for the law or their affected victims.”

“Insurance fraud is a serious offense that drives up insurance costs for all of us,” Los Angeles County District Attorney Jackie Lacey said. “These convictions represent my office’s continuing effort to aggressively protect consumers and businesses from all types of fraudulent activity.”

The Los Angeles County District Attorney’s Office prosecuted the case under the California Department of Insurance’s Life and Annuity Consumer Protection Program.

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Last Reviewed/Updated: 10/16/2018