- Home
- News Grid
- Local News
- Green Hawk
- Business
- Politics
- School Zone
- Nonprofits
- Missing Pets
- Multimedia
- Arts
- Movies
- Outdoors
- Sports
- News Releases
- Columnists
- Blogs
- Opinions
- Classifieds
- Advertise
- Donate
- Partners
Insurance Agent Charged with Felony Grand Theft
A Santa Barbara insurance agent has been charged with one felony count of grand theft for allegedly stealing more than $1.3 million in an annuity scheme, state Insurance Commissioner Steve Poizner has announced. David Abraham, 48, formerly of Brown & Brown Insurance of Santa Barbara, faces up to five years in prison if convicted.
Abraham, a licensed life insurance agent with Brown & Brown until just over a year ago, is accused of “churning,” a method by which an insurance broker or agent excessively buys and sells their clients’ securities to generate commissions. According to investigations by the state Department of Insurance, after selling a client an annuity policy, Abraham allegedly would wait until a policy was at least a year old so he would retain a commission, and then transfer the annuity policy to another company. The transfer would result in a sizable commission for Abraham, Poizner said, while the policyholders faced surrender charges of more than 10 percent of the principal. Abraham allegedly repeated this scheme until he had made more than $1.3 million in commission payments.
According to state insurance officials, when asked about the surrender charges by clients, Abraham purportedly told them the new companies would pay bonuses to make up for the surrender penalties. The unsuspecting clients were not informed that they needed to maintain their annuities for a specified period of time to realize the bonuses. Abraham’s clients suffered surrender penalties amounting to $1.9 million as a result of his alleged actions, Poizner said.
Abraham also faces lawsuits from Brown & Brown for activities the company deems were out of the scope of his employment. He allegedly did this work using his own home address as the clients’ mailing address and faked company letterhead. Abraham also faces civil lawsuits from former clients.
“We were told of the investigation about a year and a half ago, confronted the situation and summarily terminated Mr. Abraham,” said Susan Rodriguez, branch president of Brown & Brown.
The Santa Barbara County District Attorney’s Office is handling the case.
Write to sfernandez@noozhawk.com
Comments
Noozhawk's comments are moderated, but by posting here you accept your responsibility to follow our rules as part of Noozhawk's shared online community. Please keep your comments civil and helpful. Don't attack other readers personally, and do not use vulgar, abusive or discriminatory language. Use the "Report Abuse" link if a comment violates these standards or our Terms of Use.
More Local News »
Authorities Locate SBCC Student Reported Missing
His mother had asked for the public's help finding her 20-year-old 'special needs' son
Red Flag Warning Canceled; Wind Advisory Still in Effect
Sunny skies are expected to give way to some clouds over the weekend
Santa Barbara Breaks Record With High of 86 Degrees
Previous mark for May 23 was 82, set in 1949, according to the National Weather Service
Santa Maria Man Facing Child Molestation Charges
Victim reports being sexually abused over a period of time by the suspect
Police Seek Public’s Help Identifying Suspect in Retail Thefts
Surveillance photo shows person wanted in connection with thefts at two Santa Barbara stores
Weather: Partly Cloudy 53.0º
Search Noozhawk »
