Despite a guilty plea by a major participant, federal authorities said today they are still pursuing their investigation of a record $4 million phony Lloyd's insurance scam that operated in severalstates.
Ex-convict and former California insurance broker Richard Peterson last week appeared before U.S. District Court Judge Denny Chin in Manhattan and pled guilty to two felony counts in connection with the scheme.
Mr. Peterson is due for sentencing on Oct. 19, when he faces up to 20 years in prison for violating federal law against insurance sales by a felon and wire fraud.
The 65-year-old San Francisco resident, according to the indictment against him, sold 400 phony policies, which authorities said were to provide commercial liability coverage to bars and restaurants in California and elsewhere in a scheme that ran from 2000 to 2003.
Herbert Hadad, a spokesman for the U.S. Attorney's Office in Manhattan, said that the investigation is continuing. Last year a postal inspectors' complaint referred to an unnamed co-conspirator in the case who was described as a "purported" surplus lines broker.
The case was investigated by both the U.S. Postal Inspection Service and California Department of Insurance.
California Insurance Commissioner John Garamendi noted that Mr. Peterson had operated even after having his license revoked twice.
According to authorities and others with knowledge of the case, Mr. Peterson had an elaborate setup that used excellent counterfeit documents, had offices in New York as well as California, and actually paid and arranged for defense against some claims.
Mr. Peterson, according to the Postal Inspection complaint, actually kept the operation going in 2001 while he was under home- and community confinement doing an eight-month sentence for bankruptcy fraud.
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