2 Arrested in Homeless Life Insurance Scam

Times Staff Writers

Two women in their 70s were arrested Thursday after they allegedly befriended two homeless men, took out 19 life insurance policies on them and filed claims worth more than $2.2 million after the transients mysteriously died in hit-and-run pedestrian accidents in Los Angeles.

One of the men was hit by a car and killed in an alley off La Brea and Melrose avenues in 1999, and the second victim was run down in a Westwood alley last June.

Detectives said they connected the two cases several months ago during a chance meeting between two investigators in the LAPD’s West Traffic Bureau squad room.


A detective handling the death of Kenneth McDavid, 50, was talking about the peculiarity of the case when another detective interrupted him to say he had worked on a similar-sounding, unsolved hit-and-run six years ago.

Comparing notes, they realized that in both cases the bodies had been claimed by Olga Rutterschmidt, 73, of Hollywood, and Helen Golay, 75, of Santa Monica.

“It was somewhat unusual that two elderly ladies unrelated to the victim were coming in making requests for police reports ... attempting to gain custody of the body and claiming there was no one else in the world who cared about this poor soul,” said Det. Dennis Kilcoyne.

Investigators said they looked into the matter further and found that the women held 19 policies on McDavid and Paul Vados, 73 -- even though neither appeared to be related to the victims.

The women were arrested on suspicion of mail fraud. But detectives believe the pair “are involved in the deaths of these men,” Lt. Paul Vernon said.

“Our first thought was ... they would leave the actual dirty work to someone else,” Kilcoyne said. “We’re not so sure about this anymore.... This is pretty evil.”


Investigators say the women befriended McDavid and Vados and provided them with apartments in exchange for signing a life insurance policy, with Rutterschmidt and Golay listed as the beneficiaries. They then allegedly duplicated both men’s signatures on rubber stamps and used them to secure additional policies.

“After two years of payments, the policies” became good, Kilcoyne said. “Then bad things would happen.”

Police placed the women under surveillance a few weeks ago but decided to arrest them Thursday after noticing behavior they say alarmed them.

Detectives said they saw the pair meet with several older men and had them sign documents. Later, authorities said they found signature stamps bearing the names of other men.

Golay arrived in court first Thursday and sat quietly with her hands in her lap, sometimes flipping through the thick criminal complaint against her. Rutterschmidt arrived shortly before the judge took the bench. When she was asked by the judge whether she understood her rights, she answered, “Yes, I’m shocked.”

At the pink-stucco triplex that Golay owns on Ocean Park Boulevard in Santa Monica, her daughter, Kecia Golay, strongly denied that her mother was involved in any insurance scheme.

“That’s just not what’s going on,” she said. “I’m too sad to talk right now.... We have a regular life.”

A neighbor described Golay as a friendly person who drove around in a Mercedes SUV with dealer plates and put her home on the market 18 months ago for $1.5 million.

“I can’t believe she did anything,” said Cristyne Lawson. “She seems perfectly harmless.”

By contrast, Rutterschmidt lived in a modest unit of a sprawling apartment complex in the heart of Hollywood.

Authorities said she drove a greenish blue Honda Civic, and neighbors described her as temperamental.

“If she was a sweet old lady, I’d say she was a sweet old lady,” said neighbor Glenn Spinola. “But what can you do?”

Defense attorneys for both women declined to comment outside court on behalf of their clients.

Assistant U.S. Atty. Jason P. Gonzalez called the alleged effort to defraud insurance companies “a complex scheme” and said both women would pose a danger to the public and a flight risk.

Golay’s attorney told U.S. Judge Jeffrey W. Johnson that that she had no passport, no history of violence and deep ties to the community.

But the judge ordered both women detained without bail.

Court documents submitted by federal prosecutors portray a complicated plot that stretched back to 1997, when the first application for life insurance was filed in Vados’ name.

Eventually, according to the records, Rutterschmidt and Golay secured insurance policies with Monumental Life, Bankers Life, Mutual of Omaha and Guarantee Reserve Life, as well as MONY Life Insurance.

Each application told a slightly different story, authorities said.

The women were Vados’ aunts and only living relatives, they allegedly told a MONY investigator. (Vados had three living children, according to court documents.) But in an earlier application, they said Golay was Vados’ fiancee and Rutterschmidt his cousin, prosecutors contend.

According to the court papers, Golay claimed in a signed statement to investigators with Mutual of Omaha that Vados would “give me money (cash) and ask me to pay the premiums. I believe he took out insurance for Olga and I to show his appreciation and let us know he cared.”

On November 8, 1999, Vados was found dead in a Hollywood alley. He appeared, according to investigators, to have been run over by a car in a hit-and-run accident. Both women claimed his body.

In April 2000, American Bankers Life Assurance Co. of Florida sent Rutterschmidt a check for $64,964.39 to cover the claim on Vados, according to court documents. In October, Mutual of Omaha sent Golay a check for $25,000.

A year later, authorities say, the pair met McDavid and the scam got bigger.

According to prosecutors, McDavid told a friend that Golay approached him at a church in 2001 and offered to get him off the streets in exchange for his signing an application for a $500,000 life insurance policy. She, in turn, paid for the rent and utilities on a Hollywood apartment in his name for more than two years, court papers allege.

From February 2002 to May 2005, the pair allegedly obtained more than a dozen insurance policies in McDavid’s name, each with its own version of facts about his life.

Some applications listed McDavid as living at Golay’s address in Santa Monica, other’s at Rutterschmidt’s in Hollywood. They said he had an income of $50,000 to $150,000 and a net worth of $3 million to $4 million. Sometimes the women were identified as McDavid’s business partners in a venture called “HKO Associates.” In other instances, they were listed as his cousin, his half sister, his aunt.

Court records show that the Social Security Administration reported McDavid’s taxable earnings the year he died as $42.

“All the policies that were taken out by Helen and Olga were low-cost, term life insurance policies, where you can get the maximum amount of face value for the minimum premium,” said Stephen H. Galton, an attorney representing Garden State Life Insurance in a civil case against Golay. “All of these policies had a two-year contestable period. After two years, the insurance company cannot rescind or cancel the policies.”

McDavid was found dead in an alley off Westwood Boulevard just south of Wilshire Boulevard about 1 a.m. June 22, 2005. Authorities say the pair ultimately received about $2 million in insurance settlements for his death.

No charges have been filed in either death. But Gonzalez, the assistant U.S. attorney, said in court Thursday that Golay had requested a towing service three or four blocks from where McDavid’s body was discovered about an hour before he was found.

Times staff writers Juliet Chung and Nancy Wride contributed to this report.