True Crime of Insurance Fraud Video Number 74
Someone Stole My Rolls Royce
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Investing in California real estate in the 1980’s was fun. Whatever you bought you could sell for more. The doctrine: “there is always a greater fool than I,” worked.
Li Chen Hua immigrated to California from Hong Kong in 1981. He did it legally, winning a lottery for a Green Card. He came to the U.S. with his savings (converted from Hong Kong dollars to diamonds for ease of transportation).
Li set himself up in a condominium on Wilshire Boulevard just west of the community known as Westwood and east of Beverly Hills. It only cost him $500,000. He bought three other condos in the same building that first year and paid his mortgages and living expenses from the rent he collected.
In 2008 the bottom fell out of the California real estate market. Mr. Li, found himself owning real estate mortgaged to over $14,000,000 but worth only $9,000,000. The rents he collected were not sufficient to pay the various mortgages and allow him to continue in the life style with to which he had become accustomed. He needed to make a great deal of money fast and then, leaving his mortgagees to fend for themselves, return to Hong Kong for a pleasant retirement.
Mr. Li’s cousin was the number one luxury car dealer in all of the People’s Republic of China. She had no competition, an almost unlimited supply of vehicles, and overhead limited to shipping costs. Li’s account at CitiBank, Hong Kong was growing. He put his savings in broad-based stock mutual funds specializing in high risk emerging markets. His investments doubled in two years.
Li decided it was time to stop while he was ahead. He would ship his pRoger Parsons, the claims supervisor at Massive and Stoney Insurance Company, looking out his window at the slow moving, brown Illinois River, was about to order a check for the settlement when he received a report from the NICB that the car had been shipped by Li to Hong Kong a month before the reported theft. Customs officials in Hong Kong reported the car arrived and was picked up by its consignee. The NICB had copies available of the shipping documents with Mr. Li’s signature.
Massive and Stoney retained counsel to examine Mr. Li under oath about the theft. Li and his attorney appeared at Massive’s lawyer’s office belligerent, demanding immediate payment of a legitimate insurance claim.
“Mr. Li is a wealthy and highly respected member of the community. This examination under oath is a waste of time and an attempt to create useless and unwarranted delays. If payment is not received immediately, Mr. Li will sue Massive and Stoney for bad faith” Len Shyster, Li’s attorney, orated.
The examination under oath was not completed. Using his testimony at the examination under oath the NICB, working with Massive and Stoney and fifteen other insurers, the California Highway Patrol, the US Customs Service and the Fraud Division of the California Department of Insurance resulted in a major arrest of 41 individuals, including Li, for insurance fraud, grand theft, and fraud against lenders. A ring of insurance criminals who made hundreds of millions of dollars from insurers across the United States was stopped because one of the criminals allowed his customs broker to record the VIN number of his automobile before it was shipped out of the US.
Li, the instigator of the fraud, testified against his coconspirators. He served six months of electronic confinement to his penthouse apartment and paid $250,000 in restitution to one insurer.
He is now living a comfortable retirement in Hong Kong.
ZALMA OPINION
The state should be proud that they took down a massive insurance fraud scheme but, because they needed him, Li retired a rich man to Hong Kong. He may regret it now that the Communist Party took over Hong Kong.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.
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