Fraudulent Cheap Auto Insurance Scam Puts Man Behind Bars
By: Jaime Lethrop, Car Insurance Guru
CheaperCarInsurance.com
If you’ve found what seems to be an amazing deal on cheap auto insurance, hesitate before you buy the policy, especially if you haven’t heard of the company selling the insurance. Insurance fraud is running rampant, and this story is an excellent example of how innocent consumers can be had by criminals.
Had victims of James S. Kalfsbeek and co-defendant Donna Jean Rowe done their homework, they might have realized that the auto insurance policies they were buying from the Christian organization, Puget’s Sound Agricultural Society, were bogus, and that the insurance company wasn’t legitimate. The company operated from 1994 to 2002.
The couple sold people cheap auto insurance policies for a lifetime fee of $250 per vehicle as long as they owned their cars, as well as a $500 fee to join the California based organization. Over eight years, the couple collected at least $8 million from innocent people.
The couple was not licensed to sell car insurance, and didn’t pay most of the claims filed by members. They paid a few of the smaller claims, but ignored the larger ones altogether. When they did pay a claim, they raised the other members’ rates to pay for the costs.
Kalfsbeek’s company also had particular rules about what Puget’s Sound Agricultural Society’s insurance component would pay to cover. If a member was involved in an accident that involved alcohol, they wouldn’t pay, being upstanding moral and Christian people. And despite it being state law to cover pain and suffering costs related to car accidents, Kalfsbeek’s cheap auto insurance didn’t cover it, since the company considered pain and suffering to be a part of “God’s plan.”
Some insurance coverage!
Seeing the Light
When policyholders with Puget’s Sound Agricultural Society were involved in accidents, they had their licenses revoked, due to not carrying “real” insurance. These drivers had to pay the costs related to getting their licenses back in order. The other drivers in these accidents were never compensated for damages to their vehicles or their persons.
This may be when members of this bogus society realized they had purchased fraudulent cheap auto insurance. At this point, the FBI and the California Department of Insurance began to put together the pieces and realized that members of this group were being lied to, and believed they had genuine car insurance. Investigations ensued, and the couple was arrested.
Despite the fact that both Kalfsbeek and Rowe claimed to be “sovereign citizens” and immune from US prosecution, they were indeed prosecuted for conspiracy, mail fraud and money laundering. After the trial, Kalfsbeek was sentenced to 10 years in prison, and Rowe for four years, for their actions related to their fraudulent insurance scheme. They were also ordered to pay restitution for past claims filed and taken to court, but that amount has not yet been determined.
How Not to Get Scammed
If you buy car insurance from a well known insurer, you should have no problem. But if you are solicited by an organization that appears to have altruistic intentions (Kalfsbeek played off of the ruse that he was attracting good Christian drivers) and they have no known reputation, do your homework before signing a check:
- Do a search online. Look for customer reviews or listings from the Better Business Bureau
- Ask to see their insurance license
- Contact your state’s insurance board to see if they’ve heard of them
- Talk to other members and see if they’ve had claims paid
Remember: if you’re looking for cheap auto insurance, you don’t have to go off the grid to find it. CheaperCarInsurance.com has negotiated special rates with top rated companies to help you save hundreds on car insurance.
Posted: February 25, 2010
