Local News in Brief : No Contest Is Plea in Insurance Fraud

A Canoga Park man pleaded no contest Monday to six charges of grand theft stemming from a scheme in which he sold phony insurance policies, Los Angeles City Atty. James K. Hahn said.

The city attorney’s office will seek a three-year prison term for Robert R. Stuart Jr., 38, who entered his plea in Los Angeles Municipal Court, Hahn said. A no-contest plea is the equivalent of a guilty plea in criminal court but cannot be used against a defendant in a civil suit. He is scheduled to be sentenced June 30.

The insurance swindle began in 1983, when Stuart continued doing business as Great World Insurance in Van Nuys after the owner of the firm died, Hahn said. Stuart, who did bookkeeping for the firm, took money from existing customers for renewals and wrote policies for new customers, Hahn said.

“Stuart, who is not licensed to sell insurance, simply pocketed the premiums and no insurance policies were ever issued,” Hahn said.

The state Department of Insurance began investigating Stuart more than two years ago after victims found themselves without insurance when they tried to make claims on policies that turned out to be nonexistent, Hahn said. The 15 victims named in the criminal complaint paid Stuart more than $25,000 in premiums between 1983 and 1986, Hahn said.

Stuart continued to operate the scam while he was free on bail after his April, 1985, arrest, Hahn said. In 1976, Stuart was sentenced in Pomona to 20 weekends in jail and placed on three years’ probation after a grand-theft conviction for embezzling premiums, Hahn said. Stuart could not be reached for comment.