Former Costa Mesa woman arraigned on multiple felony charges in alleged $1.4 million insurance fraud scheme
A former Costa Mesa woman who now lives in Texas has been arraigned on multiple felony charges in connection to an alleged $1.4 million insurance fraud scheme.
57-year-old Karyl Lynn Reed was extradited from Seabrook, Texas, to Orange County to be arraigned on felony charges of grand theft, forgery, embezzlement, and aggravated white-collar crime.
Investigators with the California Department of Insurance allege that, between 2012 and 2019, Reed acted as an insurance agent, unlicensed, and fraudulently collected workers’ compensation premiums through her two businesses — Envoy Business Partners and Allen Specialty Group. Reed would then issue fraudulent certificates to her victims which showed they had valid coverage when, in actuality, they did not.
The investigation also revealed that Reed allegedly ran a staffing company without valid workers’ compensation coverage, and that she would personally adjust and administer employee injury claims.
These practices reportedly led to a situation in which one of the victims discovered they did not have valid coverage for an employee who was injured, and another in which one of the victims requested and updated Certificate of Insurance and learned that, not only did they not have coverage, but the number for their insurance policy belonged to that of another business.
A third victim discovered that the money they had been paying Reed for her staffing service was not being remitted to insurance, investigators claim.
The case is being handled by the Major Fraud Unit of the Orange County District Attorney’s Office, according to the CA Department of Insurance.