Printer Friendly


 SAN ANTONIO, Feb. 9 /PRNewswire/ -- In a landmark decision, a jury in San Diego, Texas found New York Life Insurance Company guilty of defrauding a Benavides, Texas grandmother of over $100,000 through a corporate cover-up of forged insurance policies and outright theft involving the misappropriation of funds by its former agent, Oscar Herrera, and company managers of the Corpus Christi, Texas office.
 The jury awarded Mrs. Lamar Hernandez over $21 million in damages including exemplary damages to deter New York Life management from such future conduct. Evidence presented at the trial, which began in October 1992, proved New York Life managers acted in "needless and reckless" disregard of its policyholders interests and violated not only industry standards, but also its own strict policies, rules and regulations regarding issuance of policies. It was further noted in court that the Corpus Christi office of New York Life Insurance had the highest incidence of "windowing," an industry term for forgery, and that unethical and illegal business practices were allowed to flourish with the approval of New York Life management personnel.
 The jury found that New York Life Insurance committed fraud, knowingly engaged in deceptive trade practices, and acted in "needless and reckless" disregard of its policyholder's interest. The undisputed evidence showed that New York Life continuously ignored and violated its own strict standards, procedures, rules, and regulations regarding issuance of policies. Moreover, the jury found that New York Life totally disregarded its corporate procedures designed to safeguard against such incidents in an effort to secure such a lucrative insurance policy. The actions of Oscar Herrera, as a licensed New York Life agent and corporate managers held the company ultimately responsible for the fraud.
 "This is a glorious victory over the despicable business procedures and blatant greed of an insurance company that allowed and even condoned unethical and illegal practices by its sales agents," declares Mr. Frank Herrera, Jr., of San Antonio, who is the attorney for the plaintiff. "New York Life Insurance, through its agent Oscar Herrera and managers committed nothing short of financial rape' and they will be made to pay dearly for their schemes of corporate cover-up, insurance fraud, and outright lies. I am extremely happy for my client, as this decision brings her and her family one step closer to recovering the lives that New York Life stole from them. New York Life and all insurance companies are now put on notice that they will be held financially responsible for the misdeeds of their agents and managers."
 The trial that began in October 1992 disclosed that Ramiro Hernandez, late husband of Lamar Hernandez, received a $331,000 medical malpractice settlement as a result of a botched operation at Audie Murphy Veterans Hospital in San Antonio. The testimony revealed word had spread in the small community of Benavides, Texas that Ramiro Hernandez had been awarded the settlement. New York Life Insurance agent, Oscar Herrera, immediately arrived on the scene and stepped forward offering to provide investment services through New York Life Insurance. It was the intention of the Hernandez' to establish educational trust funds for their grandchildren and to provide financial support for their own financial future.
 Over the course of a whole year, agent Oscar Herrera and a manager of New York Life ingratiated themselves to Ramiro and Lamar Hernandez to the point that Herrera became a trusted member of an "extended" family. He brought gifts to the Hernandez grandchildren on regular occasions and was allowed to transport the quadriplegic Ramiro Hernandez around town for various activities. Winning over the confidence and trust of the Hernandez family, Oscar Herrera began fabricating a history of lies in an effort to keep the truth from them while he and New York Life set about stealing their financial future.
 Following the death of Ramiro Hernandez in 1990, his wife, Lamar, attempted to withdraw funds to cover the costs of her husband's funeral. At that time, Oscar Herrera paid for the funeral expenses. About March 1991 Lamar Hernandez received a premium renewal notice. She then learned that the insurance policies that they had instructed Herrera to establish for them had not been issued and that the entire account had been systematically drained of all funds.
 In investigating the case, Frank Herrera, Jr. (no relation to the agent), discovered that Oscar Herrera had a lengthy history of fraudulent business practices, misdealing and a file complaints against him by customers. Evidence in the trial revealed a written report urging New York Life to dismiss agent Oscar Herrera, which was blatantly disregarded by the insurance companies upper management.
 The contention of the lawsuit was that New York Life willfully disregarded the reports of agent Herrera's misconduct and that they kept him as an employee accepting all insurance business written by him, regardless of their knowledge of his actions and therefore, should be held financially responsible for the misdeeds. Among the most heinous of actions taken by the agent was the writing of a $1,000,000 whole life insurance policy on Lamar Hernandez without the knowledge or permission of the Hernandez family, who had asked only for a $100,000 policy coverage. Agent Oscar Herrera fraudulently withdrew monies to pay two premium payments on the $1,000,000 dollar policy. These premium payments for the unauthorized $1,000,000 policy drained the entire financial reserves of the Hernandez family. Assisting Frank Herrera throughout the trial were attorneys Adam Poncio and Victor Cerda.
 -0- 2/9/93
 /CONTACT: Alice Guerra of GT&O Multi Media, 210-225-3430, or night, 210-340-7623, for Law Offices of Frank Herrera/

CO: Law Offices of Frank Herrera; New York Life Insurance Co. ST: Texas IN: INS SU:

SM-TM -- NY090 -- 4891 02/09/93 17:59 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 9, 1993

Related Articles
Executive Risk Releases The Watchdog, a New Crime Insurance Policy
Police Officers File Suit Against Metropolitan Life Insurance Company Alleging Fraud in the Sale of Life Insurance.
The Game Financial of Fraud.
The St. Paul Companies Joins Coalition Against Insurance Fraud.
Viaticals Under Watch of Securities Department.
SAMA plans new insurance regulations.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters