Man Sentenced for Fraud Scheme That Victimized Thousands of Navy Sailors in San Diego
CORONADO, CALIFORNIA - JANUARY 18: U.S. Navy sailors prepare to take down the flag on the flight deck of the USS Nimitz (CVN 68) aircraft carrier on January 18, 2020 in Coronado, California. The USS Nimitz is currently conducting routine operations and training at sea. The nuclear-powered aircraft carrier holds a flight deck area of 4.5 acres and can hold 65 aircraft along with nearly 5,000 total personnel. It is the oldest U.S. Navy carrier in active service and was commissioned on May 3, 1975. Mario Tama/Getty Images

A man was sentenced Monday to nearly one year of house arrest and ordered to pay $500,000 in restitution for taking part in a tax and insurance fraud scheme that victimized thousands of United States Navy sailors in San Diego County.

Paul Flanagan, 56, ran the insurance company "Go Navy Tax Services" along with co-defendants 54-year-old Ranjit Kalsi and 51-year-old Gregory Martin.

Trailer Operated Scam Outside Naval Base San Diego

Flanagan's company operated out of a trailer located just outside the front gate of the Naval Base San Diego, NBC San Diego reported.

The Attorney's Office stated that the "Go Navy Tax Services" offered the Navy sailors free income tax preparation services for military members and enticed the service members to purchase retirement accounts.

According to Fox5 San Diego, instead of opening those accounts, the prosecutors noted that the defendants utilized the information gathered from service members to set up life insurance policies without their knowledge or consent.

Because of the fraud scheme, the company earned more than $2 million in commissions stemming from the sales of close to 5,000 applications for life insurance policies and annuity contracts.

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Navy Sailors as American Heroes

San Diego County District Attorney Summer Stephan said that the victims of the fraud scheme of Flanagan and other defendants were Navy sailors who were serving their country. They were tricked into signing up for something that they could not afford and did not even need.

Stephan also said that their work with their law enforcement partners made it possible for the company to shut down. She added that they prosecuted the offenders in order to put the money back into the pockets of the hard-working members of the Navy.

Stephan also mentioned the satisfaction she felt when she saw the sailors receive thousands of restitution payments. She said that she was so satisfied to make a difference in the lives of the service members.

Paul Flanagan was sentenced to 357 days of house arrest after filing his plea to a felony count of conspiracy to commit insurance twisting or making misrepresentations to consumers to persuade them to take out insurance policies.

Paul Flanagan's co-defendants, Kalsi and Martin, also faced their sentences. In February, Kalsi was sentenced to 358 days in custody and ordered to pay $500,000 in restitution per her plea to a single felony account of identity theft.

On the other hand, Martin was sentenced to time served for 517 days in custody following his plea last year to a misdemeanor count of grand theft, STL News reported.

California Attorney General Rob Bonta said the military service members and their families have a lot of contributions to the nation. However, there are still individuals who want to abuse the heroes of America.

Bonta noted that he hopes that the announcement of the sentences will help the wrongs committed by the scammers of "Go Navy Tax Services."

Brian O'Rourke, the Navy spokesman, said the Navy welcomes the outcome of the fraud case and applauds the civilian-military teamwork which led to the discovery of the fraud scheme done by the company.

O'Rourke noted that restitution is a positive and fitting result, which will be appreciated by sailors who have been victimized.

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