For Release: April 13, 2006
Media Calls Only: 213-346-6342
Insurance Commissioner John Garamendi Announces the Arrest of Former L.A. Insurance Broker for Allegedly Pocketing $381,966 in Liability Insurance Premiums from Clients
Former broker is charged with nine counts of grand theft; Suspect is currently in custody without bail in Sarasota, Fl., pending extradition
SACRAMENTO – Insurance Commissioner John Garamendi announced today the arrest of Bernard Warschaw, 78, a former Los Angeles insurance broker, on an extradition warrant obtained by California Department of Insurance (CDI) Investigation Division. Warschaw was arrested on April 12 by local law enforcement authorities in Sarasota, Fl. He has already appeared in Florida court and waived his extradition.
The case began when CDI received complaints from Professional Underwriters Liability Insurance Company (PULIC) and Western Summit Insurance Brokerage. The companies alleged that Warschaw failed to remit thousands of dollars in insurance premiums he had collected for the placement of professional liability (medical malpractice) insurance policies.
“This type of act is a serious crime that ultimately victimizes all insurance consumers,” said Insurance Commissioner John Garamendi. “Insurance fraud is a major cost driver in the price Californians pay for premiums. Our mission is to protect consumers, and that includes aggressively attacking insurance fraud whenever and wherever we find it.”
The CDI’s investigation revealed that from July 2003 through December 2003, Warschaw, while operating a company in Marina Del Rey known as Pacific Professional Insurance, Inc., allegedly collected $381,966.87 in medical malpractice insurance premiums from over a dozen physicians and dentists within California as well as from other states. Warschaw then requested binding coverage without remitting the collected premiums to PULIC or any insurance company.
Bank records obtained in the investigation show fiduciary funds being transferred from a trust account to an operating account which was used to pay business and non-business related expenses.
Warschaw fled California in 2004 while under investigation by CDI and currently lives in Florida. Investigators learned in late 2005 that Warschaw was attempting to obtain a license to sell insurance in the state of Florida.
The case is being prosecuted by the Los Angeles County District Attorney’s Office. CDI investigators are coordinating with the D.A.’s Extradition Unit to bring Warschaw back to California to face charges. Warschaw is presently being charged with nine counts of grand theft. The U.S. Postal Inspection Service and Florida Department of Insurance assisted CDI with the investigation.
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