Inspection, sign scams spread as insurance fraud’s cost totals $6.7MInspection, sign scams spread as insurance fraud’s cost totals $6.7M

Lisa Jennings

SAN FRANCISCO —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

The California Restaurant Association this month alerted members that official-looking but bogus letters sent to operators from the “California Food Service Compliance Center” have threatened sanctions for not immediately posting official hand washing signs at all hand sinks. The letters, which mention state and federal food codes requiring such signage, offer posters for purchase to avoid regulatory action. Most of the information in the letter is incorrect, according to the CRA, which said the scam has been perpetrated across the country. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

In Roseville, Calif., a suburb of Sacramento, police were searching for a 48-year-old man known as “Rick” who was suspected of defrauding at least two restaurant operators while posing as an inspector for the California Department of Industrial Relations’ Division of Occupational Safety and Health, or Cal/OSHA. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

The suspect, Raymond Richard Whitall II, is thought to have committed similar scams in Southern California, targeting small, independently owned restaurants. Roseville police said they believe Whitall in February entered the El Azteca and Denny’s Cafe restaurants, claimed he was conducting a Cal/OSHA inspection, and threatened the owners with phony violations, such as having the wrong kind of soap for hand washing. Both owners gave him money after they were told thousands of dollars in fines would be deferred in exchange for cash up front. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

In San Francisco this month, a Bay Area man was sentenced to 10 years in prison for selling about $6 million in fake insurance policies to as many as 400 local restaurants and bars. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

Richard Peterson, also sometimes known as Robert James, operated an insurance brokerage that claimed to specialize in commercial liability coverage for the foodservice industry, according to California’s insurance commissioner. Between 2000 and 2003, Peterson issued policies he claimed were underwritten by Lloyd’s of London and obtained through the New York insurance brokerages Surplus Lines Inc. and Heritage Inc. The scam was discovered when a broker tried to confirm coverage and found the policies were fraudulent. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

California insurance officials said Peterson was pocketing millions of dollars in premiums, and his actions could have financially devastated the restaurants by leaving them unprotected and vulnerable. At least 350 restaurants were thought to have purchased policies from Peterson, who was scheduled to turn himself in to authorities in New York by March 30. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

Peterson, whose license was revoked previously for similar activities, operated under the names United Restaurant Services, United Restaurant Services Corp., United Restaurant Services Cooperative, United Restaurant Services Inc., United Restaurant Insurance Services and California Restaurant Specialty Cooperative Inc. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

He pleaded guilty in July 2005 to wire fraud and engaging in the business of insurance after having been convicted of a felony. A New York federal court judge ordered Peterson to pay restitution of $6.7 million. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.

Operators that may have bought insurance from Peterson were being told to contact the U.S. attorney’s office in New York City to discuss possible restitution. —A series of different scams that have victimized operators here, elsewhere in Northern California and nationwide, resulting in millions of dollars in losses, has come to light with disclosures and warnings from state, industry and police officials.