Insurance Fraud

In the latest in a lengthy string of similar disclosures, Prudential Insurance Co. has told a judge that managers in the company's Des Moines office discarded about 150 documents from customer files earlier this year. The disclosure, likely to add fuel to speculation that the giant insurance company has been systematically destroying sensitive documents, came in the form of a letter from a Prudential attorney to the judge in a class-action fraud case against the company.

In a development that could lead to court sanctions and penalties from state regulators, Prudential Insurance Co. disclosed Monday that one of its offices recently destroyed documents relevant to investigations of charges that its agents defrauded millions of life insurance buyers. The disclosure comes at a particularly bad time for the nation's largest insurance company. Newark, N.J.

Although a San Clemente businessman positively identified Paul Gorden Alleyne as the man who shot him in the face, Alleyne's attorney told a jury Tuesday that his client is the victim of mistaken identity. "Mr. [James] Wengert is wrong about who he saw shoot him," defense attorney Federico Sayre told jurors as Alleyne's trial began in Orange County Superior Court. Deputy Dist. Atty.

California joined at least three other states Thursday in formally objecting to a proposed settlement of a lawsuit charging Prudential Insurance Co. with widespread fraud in the sale of life insurance. The proposed settlement, state officials said, makes it too difficult for policyholders to get money back and won't fully reimburse most customers for their losses.

When New Jersey insurance regulators announced the fruits of a multi-state investigation of giant Prudential Insurance Co. last July, they presented it as a consumer victory. Prudential would pay a record $35-million fine, they said, as well as restitution to thousands of customers who might have been cheated by misbehaving sales agents--a bill that could add up to $1 billion or more. The New Jersey-based insurer seemed chastened.

A Los Angeles County Superior Court jury has awarded a $3.2-million judgment, one of the largest of its kind in the state, against a Santa Monica firm accused of defrauding its workers' compensation insurer. The jury found that the Santa Monica firm--WPS Inc., formerly known as Western Personnel Services Inc.--fraudulently concealed the job injury histories of temporary workers it provided to clients to lower the firm's workers' compensation insurance premiums.

Plans by the New Jersey Insurance Department to finalize a multi-state settlement with Prudential Insurance Co. early next week appeared to be unraveling Wednesday as some states called for more investigation of the company and said the proposed settlement might not adequately compensate customers. A 30-state task force, including California and led by Prudential's home state of New Jersey, has been investigating allegations of fraud in Prudential's sale of life insurance.

Attorneys in the case of Gary P. Miller, an Encino lawyer accused of second-degree murder for his alleged role in a staged freeway accident, failed to reach a plea agreement Tuesday and were ordered back to court to begin jury selection next week. Judge Harvey A. Schneider, who ordered Miller and three other defendants back to Los Angeles Superior Court, appeared hopeful that the case could still be settled before then.

Prudential Insurance Co., the nation's largest insurer, engaged in a prolonged, nationwide pattern of deceit in the sale of life insurance, and its management failed to monitor improper activity or discipline agents, according to a report issued Tuesday by a panel of state regulators. The report by a 30-state task force led by New Jersey, Prudential's home state, called for a record $35-million fine, as expected.

Two senior Prudential Insurance Co. executives sent a memo to all agents in California and other Western states in August 1993 telling them that the company would penalize agents and offices that gave out information on how to seek refunds for clients who may have been the victims of fraud. The memo was issued as growing numbers of customers were complaining that they had been victimized by misrepresentations in the sale of life insurance, and the company was facing mounting costs from refunds.