New Vice City

Cops say white-collar criminal ran down pedestrian

If Orange County treated its white-collar criminals the way it treats street thugs, David Gibbs wouldn't have wound up in a coma.

Gibbs, 42, was walking with his wife in a crosswalk on Coast Highway in Laguna Beach the evening of Nov. 2 when he was struck by a car and thrown 40 feet. His wife was not hurt. A witness said the driver sped away. Gibbs was originally reported to be comatose and in critical condition at Mission Hospital Regional Medical Center in Mission Viejo, where he is being treated for head and internal injuries and broken legs. A spokeswoman said it's against hospital policy to confirm whether a patient remains in a coma, but she reported on Nov. 18 that Gibbs' condition had been upgraded to fair, which usually implies a patient is conscious but uncomfortable.

The driver, police say, was George Jacobs, a white-collar criminal who defrauded hundreds of victims, was sentenced to probation in the 1990s and now faces charges of mowing down Gibbs.

Police might never have found Jacobs if not for his efforts to conceal damage to his car. Workers at the Laguna Beach body shop knew something was wrong when they found human hair embedded in the windshield.

Jacobs had already picked up his 1996 black Ford Thunderbird by the time Laguna Beach Police arrived at the shop, but as officers questioned workers, Jacobs returned to compliment them on a job well-done. Police say they arrested Jacobs, 77, of Newport Beach, on suspicion of felony hit-and-run after he admitted things only the driver would have known.

Jacobs is free on a mere $10,000 bail, but he'll have a tough time convincing a judge or jury that he was unaware he'd hit anyone given the fast action he took to get his T-bird's front end and windshield repaired.

Jacobs told cops he's a "retired lawyer," but that's like saying Ken Lay is a "retired lobbyist." In August 1996, Jacobs and his insurance-company partner, Thomas Ashley, then 61, of Santa Ana, were convicted in federal court of conspiracy and seven fraud charges for selling more than $15 million in worthless bonds to hundreds of contractors.

Operating as Federated Bonding Co. and Federated Bonds and Insurance Agency Inc., Jacobs and Ashley sold counterfeit bonds to construction contractors nationwide under the name of Federated Mutual Insurance Co., a legitimate insurer that hadn't given them authorization. Between 1990 and 1992, the pair pocketed more than half a million dollars in premiums, according to an FBI investigation.

Investigators say the two men also operated American Diversified Insurance Co., an offshore insurance carrier that was not licensed in California but was by the Caribbean country of Antigua and Barbuda, which is known for lax licensing. The California Department of Insurance seized American Diversified and two of its subsidiaries in 1996 after it was determined the Newport Center companies could not honor hundreds of construction-project completion bonds valued at more than $100 million.

At the time, before he was brought down by his own financial shenanigans, then-state Insurance Commissioner Chuck Quackenbush justified the raid by saying, "The Department of Insurance will not tolerate this shady dealing and will aggressively seek out and quash attempts to run these con games."

Many of American Diversified's bonds covered such government projects as road and park repairs, so the "ultimate victim," Quackenbush's spokesperson said, was the taxpayer.

For all of this, Jacobs served just three years' probation. Between the end of his probation in March 2000 and the hit-and-run earlier this month, we can at least say he apparently didn't leave anyone broke or in a coma.

 
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