OXNARD : 2 Agents Indicted in $1-Million Theft

Two Oxnard insurance agents have been indicted for allegedly stealing more than $1 million in premiums paid by clients for insurance coverage, officials said Friday.

James Dwight Ismay, 53, and Donald Smalridge, 43, were indicted Thursday on seven counts each of grand theft for allegedly diverting nearly $1.2 million of clients’ funds, officials said. It is the largest insurance fraud scheme ever prosecuted in Ventura County, said Deputy Dist. Atty. Jeff Bennett.

Ismay was also charged with five additional counts of filing false state income tax returns, Bennett said.

The indictments, returned by the grand jury, followed months of investigation into the pair’s activities while employed as account executives by Frank B. Hall & Co., an Oxnard insurance brokerage house, Bennett said.

Prosecutors allege that Ismay and Smalridge presented false invoices for insurance coverage to at least seven Ventura County companies from 1986 through 1991. The checks then were deposited into a fake business account and subsequently diverted into Ismay’s and Smalridge’s personal bank accounts, Bennett said.

The companies paying the premiums did not know they weren’t getting the coverage promised because most were umbrella policies for losses in excess of $1 million, and claims were never made on them, Bennett said. Oxnard police investigators were tipped off to the fraud in May when Frank B. Hall & Co. audited accounts managed by Ismay and Smalridge, Bennett said.

Ismay and Smalridge were both arrested Thursday. Ismay was being held at the Ventura County Jail on Friday evening on $100,000 bail. Smalridge, reached at his Oxnard home late Friday, refused to comment on the case.