California Man Sentenced for Insurance Fraud Scam
RICHMOND, VA—Joseph Giovanni Santiago, 50, of Los Angeles, California, was sentenced today to 78 months in prison, followed by three years of supervised release for engaging in a life insurance scheme involving nearly 1,000 individuals across the country. Santiago was also ordered to pay $1,313,749.07 in restitution to two separate insurance companies.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge Henry E. Hudson.
Santiago pleaded guilty on October 14, 2014 to conspiracy to commit mail fraud. According to court documents, he was the founder of an entity known as Premier Debt Solutions (or “PDS”), which purported to provide faith-based debt restructuring and other services to churches across the country. Santiago also was the founder of 4Him Ministries, which purported to be a non-profit, religious organization.
In pleading guilty, Santiago admitted that he and his conspirators misled insurance companies by falsely representing that PDS employed hundreds of independent contractors for whom PDS intended to obtain employer-funded whole life insurance policies. In fact, none of these individuals were employed by PDS. Rather, Santiago and his conspirators recruited individuals to make false applications for life insurance, posing as PDS employees, so that Santiago and his conspirators could collect the advanced commissions paid for the sale of the policies. In addition, Santiago and his conspirators convinced the policy holders to assign their rights in those policies to 4Him Ministries. The initial plan was to use the advanced commissions from the initial sale of the life insurance policies to make premium payments until they could monetize the policies by selling the policies or securitized interests in the policies to investors.
As a result of this conspiracy, insurance companies ING and Unum Group issued over 800 life insurance policies, each with a face value of $100,000, to supposed PDS employees. The insurance companies mailed these policies to individuals across the country, including individuals within the Eastern District of Virginia. ING and Unum Group also paid these conspirators more than $1.4 million in advance commissions for the sale of these life insurance policies. Ultimately, both insurance companies cancelled all the insurance policies issued to PDS members.
Santiago’s co-conspirator Mark Wayne George pleaded guilty on August 24, 2014 to conspiracy to commit mail fraud, and is scheduled to be sentenced before Judge Hudson on January 29, 2015.
This case was investigated by United States Postal Inspection Service and the Federal Bureau of Investigation. Assistant U.S. Attorney Katherine Lee Martin is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:14cr90.