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SACRAMENTO - California Attorney General Xavier Becerra and San Diego District Attorney Summer Stephan today announced the arrest of Paul Flanagan, Ranjit Kalsi, and Gregory Lee Martin for operating a tax fraud and identity theft scheme targeting military service members in San Diego County. The defendants allegedly unlawfully deceived service members into signing up and paying for unwanted life insurance policies and annuity contracts. The scheme cost service members approximately $4.8 million.
The defendants earned over $2 million in commissions related to sales of nearly 5,000 applications for life insurance policies and annuity contracts. Defendants Martin and Kalsi were arrested on July 8 and were arraigned July 10. They are currently in custody on $500,000 bail. Defendant Flanagan was arraigned today and will post $200,000 bail.
The arrests and indictments announced today are the result of a joint effort by the California Department of Justice, San Diego District Attorney’s Office, California Department of Insurance, Office of the Inspector General-Navy Region Southwest, and Naval Criminal Investigative Service. The investigation also received critical support from Naval Base San Diego and the Navy Region Legal Service Office Southwest Legal Assistance Department.
“Service members have given so much to our country – they should not have to worry about being targeted and taken advantage of by malicious scammers,” said Attorney General Xavier Becerra. “We will not tolerate this predatory and criminal behavior. The California Department of Justice and our law enforcement partners will continue to vigorously prosecute scammers who prey on American heroes who fight for our country.”
“The victims of this scam were young women and men serving our country who were essentially tricked into signing up for something they didn’t need and couldn’t afford,” said San Diego County District Attorney Summer Stephan. “Working with our law enforcement partners in California and at the Navy, we were able to shut down this operation and we will work to get money back into the pockets of service members who were taken advantage of.”
“These defendants defrauded and targeted an honored group of individuals who have dedicated their lives to protecting and serving our nation,” said Insurance Commissioner Ricardo Lara. “The alleged actions of these individuals have resulted in the loss of $4.8 million and have harmed thousands of military personnel. I am committed to working with the San Diego District Attorney’s Office and the Attorney General’s Office to put a stop to those who take advantage of hard working Californians.”
“The Navy applauds the cooperative effort of this joint civilian-military investigation,” said Navy Region Southwest spokesman Brian O’Rourke. “Financial predators are sadly a reality for many military families, even in areas as traditionally supportive to the troops as San Diego. Service members who suspect they may be the victims of fraud are encouraged to contact their local military legal assistance office.”
The San Diego County Grand Jury issued a 69-count criminal indictment alleging that the defendants committed several crimes including: conspiracy to commit forgery, conspiracy to commit a crime, grand theft of personal property, forgery of documents, the illegal use of personal identifying information, and conspiracy to commit a form of insurance fraud known as “twisting.” Twisting involves making misrepresentations to consumers to induce them to take out insurance policies, which is a crime.
The indictment further alleges that defendants operated Go Navy Tax Services out of a trailer located just outside of Naval Base San Diego that advertised free income tax preparation services for military members. The trailer featured military seals and symbols meant to deceive service members into thinking that the business was affiliated with the United States Military. Further, during the free tax preparation service, defendants obtained personal identifying information from their victims and used it to open new bank accounts in the service members’ names. Those accounts were then used to pay the unauthorized insurance premiums.
It is important to note that a criminal indictment contains charges that are only allegations against a person. Every defendant is presumed innocent until proven guilty.
A copy of the indictment is attached to the electronic version of this release.