CASE OF INTEREST

Date: January 5, 2004
Case: People v. Robert Deruelle
Contact: Krista Kastanos, Insurance Fraud, (916) 874-8992

District Attorney Jan Scully announced today that the Honorable Timothy Frawley sentenced ROBERT LORD DERUELLE to 180 days in jail, with work furlough recommended, and 5 years of formal probation in a felony case in Sacramento Superior Court. In addition, the court ordered Mr. Deruelle to pay $36,310.00 in restitution to various victims who fell prey to Mr. Deruelle's fraudulent business practices of selling extended automobile warranties through misrepresentation of his financial ability to pay for vehicle repairs.

Deruelle operated a business called Risk Protection Management or RPM, during the period between March of 2002 and January of 2003. Deruelle sold the warranties through automobile dealerships in the Sacramento region as well as the Bay Area. RPM promised that, in exchange for the purchase of the warranty, RPM would reimburse consumers for the costs of vehicle repairs incurred during the warranty period.

A selling point of the warranties was RPM's written statements that the agreement and the plan were backed by a company with assets of 1.6 billion dollars worldwide. These representations proved to be false, as only potential defects in the oil products were backed by another company. The merchandising brochure also represented that RPM was insured by an insurance company, which misled many customers to believe that RPM's business activities were backed by insurance. The only insurance RPM had consisted of casualty insurance to protect its business office. In addition, neither RPM nor Deruelle was licensed by the State.

In November of 2002, the California Department of Insurance issued a Cease and Desist order against Deruelle and RPM. When RPM stopped selling the warranties, RPM had no way to generate income, no assets, no insurance and no way to pay for the promised repairs. Of the 24 consumers contacted by the Department of Insurance Fraud Division, it is estimated that restitution is owing to these individuals in the amount of $36,310.00. There may be, however, hundreds of consumers who are without recourse to collect on the promises made by Deruelle through RPM.

Robert Deruelle admitted three felony counts of grand theft by false pretenses and one misdemeanor count of engaging in an insurance business without a license. All of the 24 consumers mentioned above were included in the restitution order.

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