NRI admits selling fake insurance
Gurjeet Singh has pleaded guilty to two counts of mail fraud, according to a statement from the FBI.india Updated: Jan 24, 2007 19:48 IST
An Indian American in California has pleaded guilty to selling bogus liability insurance policies to an airport shuttle service.
Gurjeet Singh, also known as George Singh, has pleaded guilty to two counts of mail fraud, according to a statement from the Federal Bureau of Investigation (FBI).
Singh, 56, operated Monika Insurance Services in West Hollywood even though its licence was suspended in 2001.
In April 2002, Singh was hired by Amrat Inc, the owner of Prime Time Shuttle, to provide automobile liability insurance for its approximately 100 fleet vans that provided shuttle services to and from the Los Angeles, Burbank, John Wayne, Ontario and Long Beach airports.
According to the FBI release, when he was first hired, Singh purchased insurance liability coverage from Lloyds of London but this expired after only four months because he did not pay the premiums.
Nevertheless, for the next couple of years or so, Singh provided Prime Time drivers with fraudulent insurance identification cards that named legitimate insurance carriers.
During this period, Singh provided the Public Utility Commissions with fraudulent insurance identification cards for Prime Time Shuttle. He also provided airport personnel with fraudulent and misleading information and certificate of insurance documents.
Singh billed and received approximately $1.5 million in premiums from Prime Time Shuttle during this time.
"From August 2002 through January 2005, Prime Time had no insurance at all," the release quoted Singh as stating in his plea agreement.
"Although Prime Time paid for insurance to be purchased from a legitimate American-based carrier from August 2002 through January 2005, I did not purchase such a policy for Prime Time."
During the same time, Prime Time Shuttle customers made personal injury and property damage claims that totalled at least $1.2 million, most of which Singh covered out of his own pocket.
Prime Time's licence to operate was suspended by the Public Utilities Commission in early 2005 when it realised that the shuttle service did not have any insurance. Soon after this suspension, Prime Time Shuttle declared bankruptcy.
As part of his plea, Singh acknowledged that 11 people still have claims worth at least $163,000 against Prime Time Shuttle - claims that he admits he is responsible to pay.
"This is an unfortunate example of how one person's refusal to play by the rules can impact so many," insurance commissioner Steve Poizner said.
"This individual's action caused a company to go bankrupt, and put many people at risk," he said.
Singh pleaded guilty last week before United States District Judge George P. Schiavelli, who is scheduled to sentence the defendant April 23.
The maximum sentence Judge Schiavelli can impose for each mail fraud count is 20 years in federal prison.