Long Beach Man, Daughter Charged With Multiple Felonies in Money Laundering Case

TomFallon

Tom Fallon was charged with felony money laundering and embezzlement and authorities allege he used those funds to open a cigar shop in Naples. Photo: California Department of Insurance. 

Investigators from the California Department of Insurance have identified a Long Beach man and his daughter as the operators of a scheme that diverted hundreds of thousands of dollars in workers’ compensation awards away from injured workers and into their private accounts.

Tom Fallon, 63, and his daughter Christina Fallon, 28, are believed to have taken over $273,000 from two victims who entrusted them to invest the money through Tom Fallon’s Fortis Financial Insurance Services, Inc. The elder Fallon was charged with multiple felony charges including embezzlement and money laundering Monday morning inside the Long Beach Superior Courthouse. His daughter was expected to turn herself into the Long Beach Police Department Monday and be charged with the same felony counts.

"The Fallons' alleged theft from injured workers is particularly egregious," said Insurance Commissioner Dave Jones. "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.”

The victims believed that the Fallons were putting their funds into a Workers’ Compensation Medicare set-aside arrangement, a type of agreement where a portion of an award is set aside for future medical expenses related to injuries incurred. The funds must be depleted before Medicare will pay for any treatments related to the workers’ compensation injury.

Instead, investigators found that the Fallons had taken the money the injured workers had deposited into the account and transferred it into their own private accounts. The first red flag went up in December 2014 when the victims received an interest payment check from the Fallons that bounced due to insufficient funds.

After requesting help from the state’s insurance department’s consumer services division, the resulting criminal investigation found that the Fallons had embezzled over $250,000 from the victims and used it to finance personal business ventures, including Big Daddy’s Cigar Lounge located in the Naples neighborhood of Long Beach.

The criminal complaint was filed against the Fallons on July 14 alleging two counts of theft by embezzlement and 15 counts of money laundering with a white collar crime enhancement. The enhancement could allow for the seizure of assets to help repay the victims as well as increased sentence lengths.

If convicted on all charges, the two could face a maximum of more than 16 years in prison. Tom will also be served with an order of immediate suspension of his license with further action from the insurance department dependent on the outcome of the case.



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