O.C. Man Pleads Guilty in Fraud Case : Court: David A. Erlandson of Garden Grove was charged with accepting kickbacks in the Rubell Helm insurance scam.
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LOS ANGELES — David A. Erlandson of Garden Grove pleaded guilty Monday in U.S. District Court here to taking kickbacks as part of a scheme that defrauded employers of millions of dollars in health and life insurance premiums.
Erlandson, 66, was executive vice president of the Southern California Builders Assn. and operated a health insurance program for employees of general contractors and builders who are members of the trade association.
Erlandson pleaded guilty to taking $24,500 in 12 payments from Irvine-based Rubell Helm Insurance Services Inc. as Rubell charged the insurance program excessive fees and misappropriated money.
Rubell drew national attention in 1989 when it was investigated by the U.S. Senate. It was cited by Sen. Sam Nunn (D-Ga.) as an example of insurance companies that prey on the public.
After five years of operation, the company closed its doors that year, but not before some of its executives embezzled more than $10 million to finance their lavish lifestyles, including trips to Hawaii, refurbishing a Colorado ranch, $100,000 worth of tailoring and a $5,000 bill for an exercise consultant.
The mostly worthless group health and life insurance plans Rubell administered left the company’s clients with $10 million in unpaid insurance claims.
Erlandson was the fourth person to be charged in the case.
The group includes Michael A. Rubell, 52, the company’s former chairman, who pleaded guilty to mail fraud and embezzlement last year. He agreed to cooperate with the government in further prosecutions.
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