Former Irvine Insurance Executives Indicted : Prosecution: Three are accused of stealing millions in a health-care scheme at a now-defunct firm. Two former associates have pleaded guilty.

Three former executives alleged to have stolen millions of dollars while with a now-defunct Irvine insurance company have been indicted on fraud charges, federal prosecutors said Monday.

Named by a grand jury in Los Angeles last week--the indictment was not revealed until Monday--were James B. Helm, 43, formerly of Laguna Niguel; Scott K. Clawson, 36, of San Juan Capistrano; and Douglas L. Taylor, 34, formerly of Mission Viejo.

The indictments end a federal investigation of Irvine’s Rubell Helm Insurance Services Inc., prosecutors said. Two other former executives, including the company’s chairman, had already pleaded guilty and agreed to help postal inspectors, Labor Department investigators and the Internal Revenue Service in their investigation.

Helm, who now lives in Jackson Hole, Wyo., was president and chief executive officer of Rubell Helm. He is charged with one count of conspiracy, 22 counts of mail fraud, four counts of embezzlement, one count of paying kickbacks and two counts of tax fraud.

He was arrested at his residence in Wyoming early Monday by federal investigators. The indictment was not unsealed until after his arrest, prosecutors said, because they consider Helm a flight risk.

As of Monday afternoon, he had not posted $300,000 bail and was awaiting transportation back to Los Angeles.

Helm’s ex-wife, Kathleen, once an executive vice president at Rubell Helm, pleaded guilty last year to helping siphon off more than $1 million from one of the company’s customers. She admitted spending hundreds of thousands of dollars on trips to Hawaii and to ski resorts; to renovate a ranch in Colorado; and for clothing and jewels.

In a plea bargain, she agreed to cooperate in the government investigation that has now resulted in the indictment of her ex-husband. The couple divorced after she left the company in 1988.

The 5-year-old company was shut down in 1989. In 1990 it was denounced as a scam by Sen. Sam Nunn (D-Ga.), who was holding hearings on insurance fraud.

Clawson, a former Rubell Helm vice president, is now president of a Laguna Hills insurance and consulting firm, Clawson, Jordan & Morse. He is charged with one count of conspiracy, 18 counts of mail fraud and one count of embezzlement.

Taylor, the third person named in the indictment, is the former vice president of finance at Rubell Helm. He lives in Clarkston, Wash., and is still in the insurance business, prosecutors said.

He is charged with one count of conspiracy, 22 counts of mail fraud and four counts of embezzlement.

Clawson and Taylor are to turn themselves in to postal inspectors today.

Helm was in jail Monday and could not be reached for comment. Clawson and Taylor did not return phone calls.

Rubell Helm billed itself as one of the nation’s leading experts in designing and administering affordable “self-funded” health and life insurance plans for smaller companies. For a fee, the company promised to collect premiums from employers, hold them in a trust and then use them to pay claims.

But what really happened, the government alleges, is that Helm, Clawson, Taylor and other officers actually looted the trusts of as much as $3.6 million that the government says it can definitely prove was stolen.

And there are more than $10 million in unpaid claims, prosecutors said. That has left hundreds of companies in California, Florida and other states holding the bag--and thousands of ailing employees with no means of paying hospital and doctor bills.

The government alleges that Helm, Clawson and Taylor spent the money on--among other things--their own medical bills. They also used it to “purchase and remodel homes, pay for ski vacations, trips to Hawaii and a Caribbean cruise, purchase custom-tailored clothing and expensive jewelry, lease luxury automobiles” and to make payments to Helm’s mother-in-law.

Helm, according to the indictment, delayed paying claims for sick employees and denied claims without justification.

Taylor, the indictment alleges, created false documents to cover up the theft of premiums.

Helm and Clawson rounded up customers by lying to them, prosecutors said. The two executives, with Taylor, paid bribes to executives from at least two trade groups to let Rubell Helm run their insurance programs, prosecutors said.

Those two executives have already pleaded guilty. David A. Erlandson of Garden Grove, former chairman of the California Assn. of Builders Exchanges Health and Welfare Trust--which ran insurance programs for contractors who were members of the trade group--admitted last year to taking $24,500 in kickbacks. Erlandson is helping federal investigators, too.

Charles J. McGuirk of Santa Monica, former director of a national brokerage for Diamond Benefits Life Insurance Co., last month admitted taking a $50,000 bribe. Prosecutors say they have not yet decided whether to call McGuirk as a witness and so have not cut a deal with him.

Michael A. Rubell, the former chairman of Rubell Helm, has already pleaded guilty to fraud and tax evasion and agreed to assist the government investigation as part of a plea bargain.