Two Insurance Agents Accused of Defrauding Company of $1 Million

Two Los Angeles life insurance agents were in jail Friday, suspected of defrauding their company of more than $1 million by submitting phony death certificates to collect settlements in the names of policyholders not yet dead.

The alleged scheme came to light, said Ronald E. Warthen, supervising criminal investigator for the state Department of Insurance Fraud Bureau, when a regional claims manager for the insurance company recognized the name of a small child in a pending claim.

When the manager checked, Warthen said, he discovered that death benefits had been paid by United Insurance Co. of America on behalf of five children of the same family who purportedly had died within 65 days of each other.

But all were alive and the family had not made any claims to the company.

‘Unusual Case’

“I’ve been working insurance frauds for years and this is one of the most unusual cases I have seen,” Warthen said.

William Ekaireb, 69, of Hollywood, reportedly was taken into custody outside the Federal Building in West Los Angeles, just after he had picked up a passport ordered a few days earlier. He was believed preparing to fly to London.

Morris Levine, 61, was arrested at his home in North Hollywood.

Both were arraigned before U.S. Magistrate Volney V. Brown Jr. on a federal charge of interstate transportation of stolen property. Assistant U.S. Atty. David Wiechert said that the charge involved the death benefit checks mailed from Chicago to Los Angeles.

Warthen said investigators found that Ekaireb, who recently retired after working for United Insurance for more than 30 years, and Levine, who has worked for the company nearly 15 years, would continue to pay premiums for a policyholder who had dropped coverage.

Death Certificates

After waiting for a few months, Warthen said, the pair would submit to the home office a copy of “an authentic-looking” death certificate with a claim. Checks, made out to the beneficiaries, were sent to addresses provided by the defendants, it was alleged.

Warthen said none of the beneficiaries lived at those locations, which purportedly were mail drops for the salesmen.

Fraud Bureau investigators reportedly found that none of the 40 death certificates whose copies accompanied the payment claims was on file at the Los Angeles County Hall of Records.

Nor did any of the hospitals listed on the allegedly phony death certificate copies have records of any of the policyholders dying there, the Fraud Bureau said.

300 Claims

Wiechert said the complaint involved 300 claims dating back to 1975 and totaling about $1.1 million, of which at least $123,000 “has been traced to Ekaireb’s bank accounts.”

Bail on Levine was set at $70,000. Wiechert will argue during a hearing Wednesday that Ekaireb should be held without bail because he is likely to flee. Both men originally came from India and have connections overseas, the prosecutor said.