Officials unsealed a grand jury indictment Thursday charging three San Diegans with targeting Navy service members in a conspiracy to commit fraud, grand theft, forgery and identity theft.
Authorities accuse the defendants of bilking victims out of nearly $5 million by selling them thousands of unnecessary life insurance policies.
The indictment alleges that Paul Flanagan, 54, Ranjit Kalsi, 52 and Gregory Martin II, 49, sold 4,700 policies and annuity contracts to service members who already had insurance through the Navy.
Prosecutors contend that the defendants, through their company, Go Navy Tax Service, misrepresented the company’s services.
They allegedly opened bank accounts in the service members’ names to make automatic payments toward policy premiums. Victims, however, believed they were signing up for retirement accounts or other services, not insurance.
Flanagan, the company’s owner, pleaded not guilty to nearly 70 felony counts at the downtown San Diego courthouse Thursday.
Kalsi and Martin allegedly did the bulk of the sales out of the company’s office, a trailer located near Naval Base San Diego on 32nd Street. They appeared in court Wednesday afternoon.
The defendants face more than 20 years in prison if convicted of all counts, according to the San Diego County District Attorney’s Office. Prosecutors allege the defendants reaped around $4.8 million from the scheme.
Flanagan’s attorney, Earll Pott, said outside court that the allegations against his client were “mystifying.” Service members, he said, should have been well aware from bank statements that their accounts were being accessed and why.
The attorney said, “The disturbing thing about this prosecution is the suggestion that the government’s going to come in and second-guess whether or not you need these particular financial vehicles. There’s nothing illegal about getting more insurance or having another investment vehicle that helps you feel more secure in their retirement.”
The investigation into the alleged fraud began last year, on the basis of complaints sent to the Attorney General’s office.
“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.” District Attorney Summer Stephan said.
The defendants are due back in court Wednesday.
– City News Service
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