California Insurance Commissioner Steve Poizner announced that Benjamin Thomas Milstead, 44, of Studio City, was arrested and charged with nine felony counts of grand theft and one felony count of insurance fraud. If convicted, Milstead faces a maximum of 13 years in prison. Bail was set at $485,000.According to CDI investigators, from June 2005 through December 2007, Milstead, doing business as LA Credit Insurance Services, accepted more than $212,000 in premium payments from nine businesses for the renewal of existing credit insurance policies and for the purchase of new policies. Milstead allegedly either failed to send the premiums to the insurance companies or only sent partial amounts of what was actually collected, retaining the money for personal use.
CDI became aware of the alleged theft when one of the businesses filed a complaint after discovering that Milstead only sent half of their premium payment to the insurance company resulting in a cancellation notice being sent. In order to keep the business policy active, the owner sent the insurance company an additional check for the balance of the premiums that Milstead had collected, but failed to remit. Milstead's alleged scheme against these businesses exposed them to great financial loss.
These businesses were manufacturers and distributors who sold merchandise to other vendors and retail owners. Merchandise sold by the businesses included electronic components, jewelry, stuffed animals and other various products. The purpose of the credit insurance coverage was to pay the policyholders for merchandise in the absence of their customer paying the obligated amount due after receipt of the merchandise.
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