Santa Barbara, California


The California Department of Insurance, the United States Attorneys Office for the Southern District of New York, and the Federal Bureau of Investigation are currently investigating an alleged fraud involving the sale of insurance policies to approximately 300 to 400 bar and restaurant owners throughout the State of California.

A class action lawsuit was filed by Foley & Bezek, LLP with the Santa Barbara Superior Court on November 5, 2003 on behalf of all bar and restaurant owners who purchased allegedly fraudulent polices of liability insurance purportedly issued by Lloyd’s of London. A scanned copy (in Adobe Acrobat format) of the class action complaint filed on November 5, 2003 with the Santa Barbara Superior Court can be viewed by clicking on the link above.

Lloyd’s is currently in the process of notifying bar and restaurant owners that policies of liability insurance that were purportedly issued by Lloyd’s through United Restaurant Insurance Services, Inc., Heritage Agency, and Ian Stewart apparently were not authorized, and do not provide any insurance coverage. As a result, bar owners are scrambling to obtain replacement insurance policies.

The class action lawsuit seeks to obtain the recovery of all premiums paid by bar and restaurant owners for the allegedly fraudulent insurance policies. The named plaintiffs in the class action lawsuits are James Fletcher, the owner of “Jimboz” Lounge in Santa Barbara, and Mike Bustanchury, the owner of “Tiburon Tavern” in Santa Barbara.

William Meader, Senior Investigator for the California Department of Insurance, had advised Foley & Bezek, LLP that based on the current investigation, it appears that between 300 and 400 insurance policies were issued to bar and restaurant owners throughout the State of California. Mr. Meader is also attempting to determine whether bar owners in other states are involved, and for how many years the fraudulent policies have been issued.

Lloyd’s of London’s California attorney, Dean Hansell of LeBoeuf, Lamb, Greene & MacRae, has advised Tom Foley at Foley & Bezek, LLP that Lloyd’s is actively cooperating with the investigations being conducted by the U.S. Attorney’s Office in New York, the FBI, and the California Department of Insurance.

Annual premiums for the fraudulent policies ranged between ,335.00 and ,000, depending on the size of the bars and restaurants involved.