A Long Beach man and his daughter were charged with several felonies in connection with a scheme that defrauded injured workers who invested their worker’s compensation funds, according to a statement from the California Department of Insurance on Friday.
Tom Fallon, 63, was arraigned in Superior Court in Long Beach Monday on charges that include theft by embezzlement and money laundering. His daughter, Christina Fallon, 28, also of Long Beach, is expected to surrender to police Monday, and is charged with the same crimes, authorities said.
Investigators say the two embezzled $273,954 from injured workers who had invested the funds with a company owned by Tom Fallon called Fortis Financial Insurance Services, Inc. The funds were diverted to his personal accounts for use, including opening a cigar shop in Naples called Big Daddy Cigar Lounge, investigators say.
“The Fallons’ alleged theft from injured workers is particularly egregious,” Insurance Commissioner Dave Jones said in a statement. “By stealing from injured workers who depend on the funds for future care, the Fallons may have left many victims without the resources they need for medical treatment.”
Authorities said Tom Fallon suggested that two victims who received a $273,974 settlement from a work-related traffic collision deposit their settlement funds with him in what’s known as a Workers’ Compensation Set Aside Arrangement, which would provide investment management.
In December 2014, the victims received an interest payment check from Tom Fallon that bounced for non-sufficient funds, which raised their suspicions that something was wrong, the statement from the Insurance Commissioner said. The victims filed a request for assistance with the California Department of Insurance Consumer Services Division, which led to a criminal investigation.
The Los Angeles County District Attorney’s Office filed a criminal complaint against Tom and Christina Fallon on July 14, charging them each with two counts of theft by embezzlement, and 15 counts of money laundering.
If convicted of all charges, the defendants face a maximum sentence of more than 16 years in state prison.