Three Bay Area Insurance Agents Convicted Of Conspiracy And Aggravated Identity Theft
SAN FRANCISCO – Behnam Halali, Ernesto Magat, and Karen Gagarin were found guilty on March 13, 2017, by a federal jury for their respective roles in a scheme to commit wire fraud and identity theft involving fraudulent life insurance policies, announced U.S. Attorney Brian J. Stretch, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf. The verdict follows a four-week trial before the Honorable Susan Illston, United States District Judge in San Francisco.
According to the evidence produced at trial, Halali, 32, of San Jose, Magat, 35, of Hayward, and Gagarin, 32, of San Jose, were former agents of the American Income Life Insurance Company (AIL). While working at AIL, the defendants participated in a conspiracy involving the submission of applications for life insurance policies on behalf of people at least some of whom did not know that a policy was applied for or issued in their name and/or did not want a life insurance policy. The defendants then shared the commissions and bonuses issued by AIL in connection with the fraudulent policies. The defendants paid recruiters to find people willing to take medical exams in exchange for approximately $100, and then took the personal information associated with those people and submitted applications for life insurance in their names, in many cases without the individuals’ knowledge. The defendants and their co-conspirators also paid people to participate in a fictitious survey of a medical exam company, and took the personal information associated with those people and submitted applications for life insurance, in many cases without the individuals’ knowledge. The evidence also demonstrated that the defendants and their co-conspirators created phony driver’s licenses so that their co-conspirators could take medical exams purporting to be the applicants. The defendants opened hundreds of bank accounts to fund the premiums on the fraudulent policies, and typically paid one to four months of premiums before letting the policies lapse. The defendants and their co-conspirators returned verification calls to AIL purporting to be the applicants on the fraudulent applications from telephones set up exclusively for the fraudulent scheme.
All three defendants were charged with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, wire fraud, in violation of 18 U.S.C. § 1343, and aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1). Pursuant to today’s verdict, the defendants were found guilty of all these counts. Halali and Magat were also charged with money laundering, in violation of 18 U.S.C. § 1957; these charges were dropped before trial.
Judge Illston scheduled hearings to sentence all three defendants on July 28, 2017. The maximum statutory penalties for conspiracy to commit wire fraud and for wire fraud charges in violation of 18 U.S.C. §§ 1349 and 1343 are a prison term of 20 years, and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for aggravated identity theft in violation of 18 U.S.C. § 1028A is a mandatory prison sentence of 2 years. Additional fines, restitutions and a term of supervised release may also be ordered, however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys Robert Leach and Matthew McCarthy are prosecuting the case with the assistance of Daniel Charlier-Smith, Denise Oki, and Bridget Kilkenny. This prosecution is the result of an investigation by the FBI; the IRS, Criminal Investigation; and the Commissioner of the California Department of Insurance.