San Jose Family Vanishes After Fraud Accusations

A high-living couple packed up their two children, the nanny and the family dog in a minivan and apparently fled their home after being accused of bilking clients out of $10 million in an insurance scam.

Robert Kent Morgan and his wife, Kimberly, were last seen five weeks ago, hastily packing up a rented van. A neighbor saw them drive away from their San Jose home, and even family members haven’t heard from them since, Stephen Lowney, a Santa Clara County prosecutor, said Tuesday.

“They pulled their kids out of school without paying their bills, without notice,” Lowney said.

Authorities allege that the Morgans stole $10 million from about 700 clients through their San Jose insurance business, ISU Diligent Insurance Agency. Lowney said the couple brokered deals in which people gave them money that was to be invested, and the money was instead put into ISU Diligent’s trust account. He said the couple also collected premiums from customers for policies that were never written.

Prosecutors said they never thought Robert Morgan, 36, and his wife, 35, were the type to flee. They had hired attorneys, have children and have close relatives in the area; they had no passports and supposedly had no money left.

Robert Morgan’s attorney, William Graysen, said he figures the couple panicked when authorities decided to prosecute Kimberly Morgan as well as her husband.

“My client had told the D.A. what he had done. He was waiting for them to finish the investigation, and he was going to serve his time. The wife was going to stay with the kids,” Graysen said Tuesday. “But then they came up with this theory that Kim was involved and was the ringleader. And they were going to take both Mom and Dad away from the kids.”

David Fortman, an investigator with the state’s insurance department, said hundreds of the Morgans’ clients may be unaware they’ve been bilked.

“We’ve had people getting hurt and going to the hospital and finding out they have no insurance,” he said.

The Morgans have not been officially charged with insurance fraud, but they have been charged with selling their leased Mercedes and Toyota for a total of $29,000. Lowney said he hasn’t charged the couple in the insurance crimes because he has been trying to find them.