RIVERSIDE — On January 5, 2017, former licensed insurance agent Frederick Donald Rollins, 42, of Moreno Valley, was sentenced to a year in custody after pleading guilty to one felony count of grand theft, two counts of securities fraud and an aggravated white-collar crime enhancement for stealing more than $100,000 in insurance premiums and investment funds from 10 victims. Rollins was also ordered to pay $100,363 in restitution to his victims.
"This agent left his clients at great financial risk when he failed to secure their policies, leaving them without the coverage they paid for," said Insurance Commissioner Dave Jones.
The California Department of Insurance launched an investigation after receiving multiple complaints, including one from an insurance carrier after a company attempted to file a claim for its injured employee under what turned out to be a non-existent policy number and the other from a business owner who discovered they had no legitimate workers' compensation or liability coverage.
“These crimes may go undetected at first, but with alert clients and consumers, and the work of expert investigators who can wade through complex material, those who commit insurance fraud are brought to justice,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.
The investigation revealed that Rollins, while working as a licensed agent at an insurance agency, collected premium payments from several clients for workers' compensation and commercial general liability coverage, but failed to place coverage with any insurance carrier.
After leaving that insurance agency, Rollins continued to sell fraudulent policies under a corporation he registered with the Nevada Secretary of State, but never licensed by the California Department of Insurance. The investigation revealed more than $20,000 in premium payments Rollins collected from his victims, either made payable directly to him or to FDR Presidential Services, were spent on personal expenses and not forwarded to insurance carriers to obtain insurance coverage. To conceal the scheme, Rollins issued false Certificates of Insurance, which listed the names of valid insurance carriers as the insurance providers of the fraudulent policies.
In addition to collecting premium payments for policies that were never placed, Rollins also allegedly presented himself as a registered stockbroker and accepted funds for investments from several victims. Rollins collected nearly $80,000 from various individuals, including insurance clients, under the guise that he was investing their money in stocks. The Financial Industry Regulatory Authority, a non-governmental organization that regulates stockbrokers and brokerage firms, verified that Rollins has never been licensed in any capacity to act as a stockbroker.
Rollins is no longer licensed as he failed to renew his license after it expired in March 2014. The Department of Insurance is taking appropriate administrative action against Rollins' license. The case was prosecuted by the Riverside County District Attorney's Office.