$ 1.4 million in insurance premiums for fake workers collected by an unlicensed OC agent | New university
Former Costa Mesa-based and unlicensed insurance broker Karyl Lynn Reed allegedly defrauded three victims of over $ 1.4 million by using fraudulent insurance certificates to trick clients into believing they had workers’ compensation insurance.
Reed, 57, was arrested in Seabrook, Texas and extradited to Orange County on October 7th. She was charged on October 27 with a number of offenses including aggravated theft, forgery, embezzlement and serious economic crimes. She pleaded not guilty to the charges. Lynn allegedly stole over $ 500,000.
An investigation by the California Department of Insurance (CDI) found that Reed collected insurance payments for employee compensation through its companies, Envoy Business Partners and Allenn Specialty Group, as well as issuing fraudulent insurance certificates to unsuspecting customers from 2012 to 2019 as an unlicensed agent.
Both companies were founded on April 3, 2014 and are still listed as active. A third company, Cultivate HR, Inc., is reportedly operated from a residence on Monte Vista Avenue in Costa Mesa.
“Local businesses are the lifeblood of our recovering economy. Ms. Reed’s alleged acts are jeopardizing the livelihoods of these business owners by stealing their money and leaving them uninsured, ”said Insurance Commissioner Ricardo Lara. “My department is committed to investigating and stopping unlicensed agents to protect California’s consumers and businesses that help keep our economy strong.”
Reed had also operated a recruiting company with no valid workers’ compensation insurance and was personally involved in processing and managing employee claims for damages.
The case is now being prosecuted by the Orange County’s District Attorney’s Major Fraud Unit, which was filed in a criminal complaint dated Jan.
The victims included a Los Angeles real estate management company and autism therapy company, a wholesale bakery in Santa Ana and an assisted living facility in Long Beach.
CDI officials reported that one of the companies allegedly defrauded by Reed discovered its lack of insurance coverage when an employee was injured at work. Another found that they were not insured and were given a different company’s policy number. The investigation also found that another company learned that the money they had paid Reed for their recruitment had not been sent to the insurance company.
Prosecutors have charged Reed with an increase in the crime that can extend her sentence if convicted. Reed faces another trial in December.
Consumers are encouraged to check their agent’s license status or contact the Department of Insurance at 800-927-4357 to determine if they are a victim of insurance fraud.
Veronica Garza is City News intern for the fall quarter of 2021. She can be reached at [email protected].