SAN DIEGO (CNS) – A man who took part in a tax and insurance fraud scheme that victimized thousands of U.S. Navy sailors in San Diego County was sentenced Monday to nearly one year of house arrest and ordered to pay $500,000 in restitution.
Paul Flanagan, 56, ran Go Navy Tax Services along with co-defendants Ranjit Kalsi, 54, and Gregory Martin, 51. The company operated out of a trailer located just outside Naval Base San Diego’s front gate.
According to the U.S. Attorney’s Office, Go Navy Tax Services offered free income tax preparation services for military members and persuaded service members to purchase retirement accounts. However, prosecutors say that rather than opening those accounts, the defendants used the service members’ personal information to open life insurance policies without their knowledge or consent, earning the company more than $2 million in commissions stemming from the sales of nearly 5,000 applications for life insurance policies and annuity contracts.
“The victims of this scam were Navy sailors serving our country and were 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, we were able to shut down the scam, prosecute the offenders, and put money back into the pockets of our hard-working military members,” she said. “It is particularly satisfying to see these sailors receiving restitution payments, some in the thousands of dollars, to make a positive difference in their lives.”
Flanagan was sentenced to 357 days of house arrest following his plea to a felony count of conspiracy to commit insurance twisting, or making misrepresentations to consumers to induce them to take out insurance policies.
Kalsi was sentenced in February to 358 days in custody and ordered to pay $500,000 in restitution per her plea to a single felony count of identity theft.
Martin was sentenced to time served for 517 days he served in custody following his plea last year to a misdemeanor count of grand theft.
California Attorney General Rob Bonta said, “Our military service members and their families contribute so much to our nation — yet there are people without honor who want to cheat our American heroes. We hope that today’s announcement helps right the wrongs that were committed by the malicious scammers of Go Navy Tax.”
Navy spokesman Brian O’Rourke said: “The Navy welcomes the outcome of this fraud case and applauds the civilian-military teamwork which led to it. Restitution is a positive and fitting result, one which will be appreciated by sailors who have been victimized. Financial predators are sadly a reality for many junior military men and women and their families, even in areas as traditionally supportive to the troops as San Diego.”
O’Rourke said service members who suspect they may be the victims of fraud are encouraged to contact their local military legal assistance office.
Potential fraud victims can report what happened to the state Attorney General’s Office at oag.ca.gov/consumers.
Copyright 2021, City News Service, Inc.