OAKLAND — A former insurance coverage government pleaded responsible Friday to conspiring to commit insurance coverage fraud by an insurance coverage firm he based in Livermore, leading to greater than $20 million in losses and the collapse of two insurance coverage firms, authorities stated.
“Thandi and his co-conspirators’ scheme was far-reaching and had devastating financial consequences, including the collapse of two insurance companies and millions in losses to hundreds of victims,” stated United States Lawyer Craig H. Missakian. “Together with our law enforcement partners, we work tirelessly to ensure that individuals who commit insurance and other forms of fraud are held accountable, and this case is an important example of our efforts.”
Three co-defendants, Sandeep Sahota, Jaspreet Padda and Gunjan Aggarwal, beforehand pleaded responsible to the identical prices, prosecutors stated. Thandi faces as much as 5 years in jail and a $250,000 high-quality for every rely.
Thandi was the founding father of International Century Insurance coverage Brokers, a Livermore-based insurance coverage brokerage that helped handle insurance coverage firm International Hawk Danger Retention Group, prosecutors stated. Thandi conspired with others starting round Could 2018 to create pretend monetary information stating that International Hawk had increased capital and reserves than they did. They then submitted these information, which included pretend brokerage information and financial institution statements, to the Vermont Division of Monetary Regulation, which was the corporate’s insurance coverage regulator.
Regulators found the fraud in 2020 and declared International Hawk liquidated and bancrupt, prosecutors added.
“Today’s guilty plea reflects the FBI’s commitment to holding accountable those who manipulate financial records and abuse positions of trust for personal gain. By misrepresenting assets and misappropriating funds, Thandi not only misled regulators but also defrauded his company’s customers,” stated FBI Particular Agent in Cost Sanjay Virmani. “The FBI and our partners will continue to investigate and bring to justice those who exploit consumers through corporate fraud.”
Prosecutors additional stated that Thandi used $1.5 million of funds from International Hawk for his personal private use, together with to buy a automobile and a home. He additionally used funds which are legally required to be retained by the corporate as insurance coverage reserves to buy and promote shares, prosecutors added.
In 2016, Thandi took out a $6.4 million line of credit score in International Hawk’s identify. The road of credit score was later upped to $14 million, and it had not been authorised by the corporate’s board of administrators, prosecutors stated. Thandi once more utilized for an unauthorized $14.75 million line of credit score underneath International Hawk’s identify in 2017.
Thandi additionally conspired to create false monetary paperwork for a Houston Normal Insurance coverage Alternate, a Texas-based insurance coverage firm, to falsely present that the corporate had tens of millions of {dollars} in reserves and belongings regardless of not having the extent of reserves required by Texas regulation, prosecutors stated. These paperwork have been submitted to the Texas Division of Insurance coverage.
“Criminals who would use the U.S. mail to commit fraud should know that postal inspectors and our federal law enforcement partners remain committed to protecting the public from financial crime,” stated Stephen M. Sherwood, inspector in control of the U.S. Postal Inspection Service, San Francisco Division.
The case was investigated by the Federal Bureau of Investigation and the U.S. Postal Inspection Service.
Thandi is at the moment out of custody on bail. He’s scheduled to subsequent seem in courtroom Aug. 29 for a standing listening to on sentencing.
