LOS ANGELES (Legal Newsline) — Three Insurance agents are suing their former employers, alleging fraud and unjust enrichment occurred as a result of their being enrolled in the companies' "business ownership" programs.
Cecil Goff, William Bergdoll and Patricia Pacheco filed a complaint on Oct. 6 in the U.S. District Court for the Central District of California's Western Division against Nationwide Mutual Insurance Co. and other firms for alleged violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).
According to the complaint, the plaintiffs allege that starting in 2003 and continuing through the present, the defendants created and conducted a RICO enterprise that requires agents to make large investments but offered little to no chance of recouping the investments into a business they could actually own.
Agents were induced to borrow large sums of money through a sham loan program with Nationwide Bank to start up their insurance agencies when in fact agents did not own their own agencies or their books of business, the complaint said.
The plaintiffs hold Nationwide Mutual Insurance Co. and the other firms responsible because the defendants allegedly failed to disclose the extremely high failure rate to the agents either before or after they entered and implemented a fraudulent scheme to expand business and generate large profits at the agents' expense.
The plaintiffs request a trial by jury and seek judgment to compensatory and trebled damages, award of declaratory and injunctive relief, attorneys' fees, costs and other relief deemed proper by the court. They are represented by Gabriel Barenfeld and Gretchen M. Nelson of Nelson & Fraenkel LLP in Los Angeles and Crueger Dickinson LLC of Whitefish Bay, Wis.
U.S. District Court for the Central District of California Western Division Case number 2:17-cv-07358-PSG-AFM