Three San Diego men were charged with selling thousands of “expensive, unnecessary” life insurance policies, which reportedly victimized more than 100 servicemembers.
Prosecutors said the alleged victims were lured into a small trailer set up outside Naval Base San Diego and adorned in American flags under the guise of a free tax preparation service.
The victims – most of who are enlisted sailors – were reportedly targeted by a company known as Go Navy Tax Services, according to the San Diego County District Attorney’s Office.
Go Navy Tax Services is accused of fraudulently gaining entry into the Department of Defense’s payroll system and setting up automatic payments to bank accounts that were opened without the knowledge or consent of the servicemembers, the San Diego County District Attorney’s Office said.
The suspects are charged with selling more than 4,700 of these life insurance polices with a total loss to victims reaching $4.8 million over 10 years.
Paul Flanagan, 54; Ranjit Kalsi, 52; and Gregory Martin II, 49, were indicted by a San Diego grand jury on 36 counts of conspiracy to commit fraud, grand theft, forgery and identity theft.
Kalsi and Martin II pleaded not guilty to charges on Wednesday. They remain in custody.
Flanagan pleaded not guilty on Thursday but remains free and will post $200,000 on Friday.
“It certainly is troubling that a business would intentionally target active-duty servicemembers, especially young servicemembers getting their start who are not financially sophisticated,” said Deputy District Attorney Gina Darvas, who is prosecuting the case.
But Flanagan’s attorney called it an honorable business and said Flanagan was devoted to serving the military. The attorney took issue with prosecutors characterizing the life insurance policies as unnecessary.
“There’s nothing illegal about getting more insurance or having another investment vehicle that helps you feel more secure in your retirement,” said attorney Earll Pott.
Pott also said the servicemembers had knowledge of what they were purchasing and gave access to their accounts.
“It defies logic that they didn’t understand that these agents were getting access to their accounts,” he said.
The San Diego County District Attorney’s Office worked with the California Attorney General’s Office, California Department of Insurance and Naval Criminal Investigative Service to investigate and prosecute this case.