Mitchell Basil Zogob, Insurance Broker Fraudster, Brokers 10 Years in Can

INSURANCE BROKER SENTENCED TO 10 YEARS IN PRISON FOR GRAND THEFT AND
INSURANCE FRAUD BY TAKING $4.6 MILLION IN PREMIUMS AND ISSUING FALSE
CERTIFICATES OF INSURANCE


SANTA ANA – An insurance broker pleaded guilty yesterday to a court
offer of 10 years in state prison for grand theft and insurance fraud by
taking $4.6 million in premiums and issuing false certificates of
insurance to four companies. Mitchell Basil Zogob, 51, San Juan
Capistrano, pleaded guilty April 5, 2010, to five felony counts of grand
theft by embezzlement, five felony counts of insurance fraud, five
felony counts of transacting as an insurance business without a
certificate of authority, four felony counts of forgery, three felony
counts of tax fraud, one felony count of premium fraud, and sentencing
enhancement allegations for aggravated white collar crime over $500,000
and the taking of over $2.5 million.

“These types of fraud are especially egregious because it leaves
companies who are buying insurance for their workers and their employees
unprotected. It hurts legitimately injured workers from receiving the
benefit they deserve. Any defendant fraudulently collecting millions of
dollars to support their fancy lifestyle deserves to go to prison,”
said Insurance Commissioner Steve Poizner.

Between January 2002 and April 2004, Zogob worked as an insurance broker
and operated two businesses, Professional Employers Assurance Group
(PEAG) and Program Administrators, Inc., out of a Newport Beach office
on Birch Street. He was a licensed broker for over 20 years but did not
renew his license in October 2002.

Between January 2002 and February 2003, the defendant sold workers'
compensation insurance policies to MicroSource Management and Joint
Employers Group. These companies outsource the management of payroll,
workers' compensation, human resources and employee benefits to other
companies. Zogob collected the premium from MicroSource Management, who
had 60 client companies and 16,000 employees, and issued a forged
certificate of insurance. Zogob collected the premium from Joint
Employers Group, who had over 75 payroll companies and 3,500 employees,
and issued a forged certificate of insurance. The defendant kept the
money for himself and spent it on his extravagant lifestyle.

The defendant also sold workers' compensation insurance to two payroll
companies, Media Services Inc. and Olympic Partners/C.A.P.S. who provide
services to the entertainment industry and covered over 60,000
employees. Zogob fraudulently used AIG/Granite State, Hartford, Regency,
and Transglobal Indemnity Ltd., as insurance carriers on the forged
certificates. Hartford, although a valid policy, was an extended
coverage from a Texas business' personal office insurance policy which
the defendant used to issue bogus certificates of insurance. Regency and
Transglobal Indemnity Ltd. are alleged off-shore companies whose status
could not be verified and are not authorized to write insurance
policies in California. Zogob had received insurance from AIG/Granite
State for PEAG and fraudulently used that insurance carrier name and
certificate number to issue MicroSource Management certificates of
insurance.

Between January 2003 and January 2004, Zogob did business with Kellogg
& Associates. He sold the company workers' compensation insurance
but failed to provide a valid certificate of insurance.

The workers' compensation insurance claims filed by individual employees
and paid out by the victimized companies is still under review and the
amount is yet to be determined.

From April 2001 to April 2003, Zogob willfully failed to file a tax
return and presently owes the Franchise Tax Board over $122,000.