A longtime South County veterinarian and his real estate professional wife spent a night in jail recently as part of a $600,000 insurance fraud case by the state. Dr. Edward Julian Putnam, the 71-year-old owner of Foothill Animal Hospital in Lake Forest, and his 68-year-old wife Maxine Johanna Putnam, a licensed Realtor, have pleaded not guilty to charges that could change their home address from San Juan Capistrano to state prison cells for up to five years.
The couple and Reuben Banuelos, 63, of Aliso Viejo, are accused of helping two San Diego-area insurance agents defraud insurance companies in 2010 by falsifying applications for life insurance policies.
Tyler Wilkinson, 37, of San Diego, and Ian Frisch, 31, of Bonita, allegedly offered the Putnams and Banuelos free insurance if they paid a first-time premium for which they would be reimbursed. People recruited for such schemes are known as "cappers," according to the California Department of Insurance, whose detectives arrested Wilkinson on suspicion of recruiting alleged cappers Ed and Maxine Putnam and Banuelos and sending them to Frisch to fill out the sham paperwork.
The Orange County Superior Court case against the Putnams and Banuelos involves their failure to disclose on their applications that they were being reimbursed for the premiums as well as allowing their policies to lapse without paying anything–while Wilkinson and Frisch collected $600,000 in commissions, according to prosecutors.
The vet, his wife and Banuelos pleaded not guilty at their July 3 arraignment to felony grand theft charges that could send them to state prison for five years apiece with convictions. Wilkinson and Frisch are each charged with four felony counts of grand theft, with sentencing enhancement allegations for causing more than $100,000 in loss, aggravated white collar crime more than $500,000, and property loss more than $200,000. They face up to 12 years in the slammer if convicted.
"Dr. Edward Putnam graduated in 1974 from the University of Missouri, College of Veterinary Medicine," reads his Foothill Animal Hospital bio. "In 1976, Dr. Putnam moved to Orange County where he spent several years as Chief of Staff at a large emergency clinic. Since then, he has been involved in general small animal practice in the Orange County area."
He also has an inactive law license with the California State Bar Association. Putnam and his wife are due back in court Sept. 9, according to the Department of Insurance.
"Arresting the individuals behind this complex fraud conspiracy is another success for the department, insurers and all California insurance consumers," says Insurance Commissioner Dave Jones in a statement. "Insurance crime is an expensive drain on our economy, resulting in higher costs for all consumers."
Jones' department is being assisted by the FBI, California Department of Business Oversight and the Orange County District Attorney's office in the ongoing investigation, which in January resulted in the arrest of 84-year-old Morgan Laws, 84, of San Clemente. Laws went on to plead guilty to grand theft and unlicensed sales counts.