SAN FRANCISCO A Bay Area man was sentenced to 10 years in prison earlier this week on charges of selling about $6 million in fake insurance policies to area restaurants and bars.
Richard Peterson, who was sometimes known as Robert James, operated an insurance brokerage firm that claimed to specialize in commercial liability insurance for the foodservice industry, according to the state insurance commissioner. Between 2000 and 2003, Peterson issued policies he claimed were underwritten by Lloyd's of London obtained through two New York insurance brokerages called Surplus Lines Inc. and Heritage Inc. The scam was discovered when a broker tried to confirm coverage and found the policies were fraudulent.
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.
Peterson, whose license was revoked previously for similar activities, operated under the names United Restaurant Services; United Restaurant Services Corp.; United Restaurant Services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.
Peterson 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. Clients that may have bought insurance from Peterson should contact the U.S. Attorney's Office in New York City to discuss possible restitution.