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Hughson insurance agent arrested for fraud, grand theft

POSTED January 14, 2011 9:37 p.m.

A Hughson insurance agent is facing allegations of insurance fraud after a state watchdog agency accused her of bilking policyholders out of their premiums.

The California Department of Insurance announced Friday that Martha Jane Terry, 63, had been arrested on 33 felony counts of insurance fraud including fiduciary theft, embezzlement and grand theft.

The criminal complaint alleges that from October 2006 to September 2010, Terry stole and embezzled premiums from 11 consumers while acting as a licensed broker/agent at the Hughson Insurance Agency in Hughson. CDI Investigators found that Terry received payments for homeowner’s and automobile insurance, but either failed to place the insurance or did not remit the full premiums to the insurer. Some clients who had been given cash receipts and insurance cards found out they weren’t covered when they submitted claims after an accident, according to CDI investigators. When one of her alleged victims was involved in an accident and discovered she had no insurance, she sued Terry and won a judgment against her for $7,500, the CDI reported.

“Any licensed insurance agent that steals from policyholders will be fully investigated and prosecuted by my department,” said Insurance Commissioner Dave Jones. “Bilking Californians out of their premium payments leaves consumers extremely vulnerable and potentially without coverage should they get into an accident, have a health issue or suffer damage to their home and it will not be tolerated.”

According to CDI investigators, Terry did not have the authority to operate under the business name of Hughson Insurance. On Wednesday the CDI issued an Order of Immediate Suspension against Terry pursuant to a section of the California Insurance Code.

Terry is scheduled for an arraignment Feb. 2 in Stanislaus County Superior Court.

Consumers who purchased insurance from Terry are encouraged to call the insurance company to verify that coverage is in place. Consumers who believe they did not receive insurance they paid Terry for should call Investigator James Ochoa at the California Department of Insurance at (916) 854-5835.

To contact Sabra Stafford, e-mail sstafford@turlockjournal.com or call 634-9141 ext. 2002.

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