Man sentenced in insurance fraud scheme targeting 4,000-plus sailors
SAN DIEGO, Calif. (Tribune News Service) — An insurance agent was sentenced Monday to 357 days of house arrest and ordered to pay $500,000 in restitution for running an insurance scheme that defrauded more than 4,000 Navy sailors in San Diego County, state and local authorities said.
Paul Flanagan, 56, pleaded guilty in August to a felony count of conspiracy to commit a type of insurance fraud known as “twisting.”
Flanagan’s sentencing in San Diego Superior Court was the latest development in the case. Co-defendant Ranjit Kalsi, 54, pleaded guilty to a felony count of identity theft and was sentenced Feb. 10 to 358 days in custody and ordered to pay $500,000 in restitution. A third defendant, Gregory Martin, 51, pleaded guilty Dec. 7 to a misdemeanor count of grand theft. He received credit for 517 days in custody.
Prosecutors said Flanagan owned Go Navy Tax Services, which Kalsi and Martin ran out of a trailer located near the main gate of Naval Base San Diego. The trailer was decorated with military flags, which prosecutors said was an effort to make sailors believe the business was affiliated with the military.
The defendants lured sailors into the trailer under the pretext of free tax preparation services, then persuaded them to purchase retirement accounts. But instead of opening the accounts, the defendants used the sailors’ personal information to open life insurance policies without their knowledge or consent, prosecutors said.
“The victims of this scam were Navy sailors serving our country and were tricked into signing up for something they didn’t need and couldn’t afford,” District Attorney Summer Stephan said in a statement. “Working with our law enforcement partners, we were able to shut down the scam, prosecute the offenders, and put money back into the pockets of our hard-working military members. It is particularly satisfying to see these sailors receiving restitution payments, some in the thousands of dollars, to make a positive difference in their lives.”
Prosecutors said the defendants earned more than $2 million in commissions off the sales of nearly 5,000 insurance policies and annuity contracts. Prosecutors previously said the fraud dated to 2010.
“Our military service members and their families contribute so much to our nation — yet there are people without honor who want to cheat our American heroes,” California Attorney General Rob Bonta said in a statement. “We hope that today’s announcement helps right the wrongs that were committed by the malicious scammers of Go Navy Tax.”
Navy Region Southwest spokesman Brian O’Rourke applauded the outcome of the case.
“Restitution is a positive and fitting result, one which will be appreciated by sailors who have been victimized,” he said. “Financial predators are sadly a reality for many junior military men and women and their families, even in areas as traditionally supportive to the troops as San Diego. Service members who suspect they may be the victims of fraud are encouraged to contact their local military legal assistance office.”
The fraud was investigated by the Naval Criminal Investigative Service, Navy Region Southwest Office of the Inspector General Investigators, the California Department of Insurance and the California Department of Justice.
Prosecutors brought evidence to a San Diego County grand jury, which heard testimony from 40 witnesses over a two-week period. The grand jury indicted Flanagan, Kalsi and Martin in July 2019.
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