Monday, September 28, 2009

Insurance Fraud Conviction After Trial For Obtaining Health Benefits For Ex-Wife In Pomona, California

A recent case is a sign of the times: felony prosecution of a politician for applying for and obtaining health insurance for his ex-wife. The total value of the health insurance benefits was $4,000. On September 18, 2009, a jury in Pomona, California returned guilty verdicts against Xavier Alvarez, a board member of the Three Valleys Municipal Water District on counts of (1) misappropriation of public funds, (2) insurance fraud and (3) grand theft.

In 2006, Mr. Alvarez was elected by the voters of south Pomona to the Three Valleys Water District. The Three Valleys Municipal Water District provides medical insurance to its directors, their spouses, children and other dependents. Prosecutors contended that Mr. Alvarez failed to disclose that he had been divorced for five years when he applied for and received health insurance benefits for his ex-wife Juanita Ruiz from January to October 2007. The loss in health insurance premiums to the Water District was estimated at $4,000.

The case was prosecuted by the Public Integrity Division of the Los Angeles County District Attorney's Office. Mr. Alvarez was charged on September 19, 2008 and it took approximately one year for the case to go to trial. After the jury returned its guilty verdicts, Mr. Alvarez was remanded into custody even though he had been out of custody pending trial.

Attorney Commentary: First, if this had been a private company it is unlikely that there would have been a criminal prosecution. Since this was an elected position, the Public Integrity Unit became involved. When the government is dealing with "public funds" there is more of an incentive for the government to prosecute.

Second, Mr. Alvarez had other problems which probably led to this investigation. He is on federal probation for falsely claiming to be a Medal of Honor recipient which was a misdemeanor. Mr. Alvarez did not resign from the water board after pleading guilty to that misdemeanor count even though there was local pressure to do so. That prior conviction arose from a Walnut Valley Municipal Water District meeting where Mr. Alvarez said he retired after 25 years in the Marines, had been wounded many times and was awarded a Congressional Medal of Honor in 1987. He later admitted he was never in the military.

Third, as result of this recent felony conviction, Mr. Alvarez will be disqualified from holding any office in the state.

Posted by Tracy Green. Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have developed an expertise in insurance fraud cases over the past 20 years. The firm website is


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