Los Angeles-area insurance agents arrested for $300,000 fraud scheme
Defendants allegedly applied for insurance policies using stolen or purchased personal information
LOS ANGELES – Two former insurance agents were arrested Thursday on multiple felony counts for allegedly falsifying life insurance applications to collect more than $300,000 in unearned commissions.
Ali Kakande, 37, of Los Angeles, and Sulaiman Lutale, 35, of Woodland Hills, were taken into custody by investigators with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Department of Insurance. The defendants are charged with insurance fraud, identify theft, money laundering, grand theft, and forgery.
Investigators allege that prior to becoming licensed agents, the duo submitted approximately 70 fraudulent life insurance policy applications to various insurance carriers under another licensee’s appointments. Lutale collected over $80,000 in unearned commissions from the fraudulent applications.
“I have zero tolerance for dishonest agents who rip off insurers or consumers for their own financial gain,” said California Insurance Commissioner Dave Jones. “The Department of Insurance regulates more than 360,000 licensed agents and brokers who work hard to be professional and honest in their business practices. Agents like these tarnish the reputation of the California insurance industry.”
In 2012, both defendants became licensed agents and continued their scheme - submitting an additional 89 life insurance policy applications from 2012 to 2014 and collecting more than $138,000 in unearned commissions. After they were no longer able to successfully submit new business under their own licenses, they continued their scheme by using licenses from at least three other licensees to submit over 70 additional fraudulent applications and collect more than $90,000 in unearned commissions.
“Fraud schemes like the one uncovered in this case result in billions of dollars in losses every year in this country and cause incalculable heartache and financial harm to law-abiding consumers,” said Joseph Macias, special agent in charge for HSI Los Angeles. “HSI is committed to working with its law enforcement partners to pursue such cases aggressively - ensuring those who brazenly enrich themselves through fraud and identify theft are held accountable for their crimes.”
To obtain personal information for the fraudulent applications, investigators allege Kakande and Lutale recruited applicants by paying them $50 to $200 and promising they would receive free life insurance policies. Other applicants were victims of identity theft and unaware that life insurance policies had been issued in their names.
Life insurance policy applications were also submitted with Kakande and Lutale as the purported policyholders. 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.
The investigation also showed that the premiums were generally 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 advance commission scheme.
Kakande was booked into the Orange County Central Jail, with bail set at $470,000. Lutale was booked into Los Angeles County Jail, with bail set at $370,000.
The Los Angeles County District Attorney’s Office is prosecuting the case under the California Department of Insurance’s Life and Annuity Consumer Protection Program.
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