Insurance Consultant to Be Resentenced

A former Orange County insurance consultant is scheduled to be resentenced Monday, three years after he was convicted of conspiracy and fraud in a case cited in congressional hearings as an example of how some in the industry prey on small-business owners.

James B. Helm, 47, formerly of Laguna Niguel, had been sentenced to a four-year term but was given a chance to obtain a reduced sentence after a federal appeals court found that there was not enough evidence to convict him of one of the charges, paying kickbacks to influence the operations of a pension plan.

The U.S. 9th Circuit Court of Appeals upheld his convictions for conspiracy, mail fraud and embezzlement.

Helm and four others at Rubell Helm Insurance Services Inc. in Newport Beach, along with two people who worked elsewhere, were accused of fraud, bribery and other crimes in stealing $3.4 million in insurance premiums they collected from thousands of employees at small companies in three states. Authorities now believe that as much as $10 million was embezzled.

A jury found Helm and two others guilty, but the appeals court reversed the conviction of Douglas L. Taylor, 38, formerly of Mission Viejo. The three-judge panel upheld the conviction of Scott K. Clawson, 40, of San Juan Capistrano. The other four had pleaded guilty.

Helm, now of Jackson Hole, Wyo., and Clawson were ordered to appear Monday before U.S. District Judge Mariana R. Pfaelzer, the trial judge.

Helm’s attorney, Richard Callahan of Pasadena, said that he and his client have discussed an appeal to the U.S. Supreme Court but that no decision has been made.

Clawson’s lawyers said they are not sure why the judge wants their client in court. He had been put on probation for three years.

“Clawson was the whistle-blower who got this thing going,” said Joseph Bentley, one of his attorneys. “He was in shock when he was indicted, and I think even the judge was surprised when the jury convicted him.”

At the 1994 trial of the trio, Pfaelzer remarked that Clawson appeared to be the “least culpable” defendant, said R. Brian Timmons, also one of his attorneys.

Rubell Helm Insurance promoted itself in the 1980s as a leader in group insurance. The company came under suspicion in early 1989 and soon was being investigated by a U.S. Senate governmental affairs subcommittee, which held hearings on insurance fraud in May 1990.

At the time, Sen. Sam Nunn (D-Ga.) called the company’s operations a scam and used Rubell Helm as an example of a nationwide insurance scheme that preyed on owners of small businesses seeking inexpensive group insurance for their employees.

The company closed its doors in 1989 after five years of operation, during which it collected $12 million in premiums.

The company’s chairman, Michael A. Rubell, pleaded guilty in 1991 to mail fraud, embezzlement and tax evasion and agreed to testify against others. He was sentenced to 2 1/2 years in prison. The following year, three others pleaded guilty to fraud charges, including Kathleen Stewart, a former Rubell Helm executive vice president and Helm’s former wife. She was put on probation for three months.