PORTLAND, Ore. – Ralph Dean Arnold, 61, of Portland, was sentenced today to 33 months in federal prison for orchestrating a multi-year scheme to defraud unclaimed property owners held in California, resulting in a loss to victims of more than $1.5 million. Arnold was ordered to pay more than $1.54 million in restitution.

“Many states have established unclaimed property registers designed to protect personal financial property until it can be returned to its rightful owners. Misusing this information and fraudulently assuming other’s identities to collect money are serious crimes, plain and simple,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “I’d like to thank the U.S. Postal Inspection Service and the entire investigative team for working tirelessly to bring this defendant to justice on behalf of the victims.”

“This case is especially egregious as the defendant victimized individuals in desperate need of the life changing funds he stole. Our dedicated team of fraud investigators work tirelessly with the Department of Justice to investigate complex mail fraud cases like this one seeking to separate postal customers from their money,” said Tony Galetti, Inspector in Charge, U.S. Postal Inspection Service (USPIS) Seattle Division.

According to court documents, between 2012 and 2017, Arnold engaged in a lucrative scheme to defraud unclaimed property owners listed on the California Controller’s Office website. Arnold used information from the website to pose as individuals or organizations seeking to claim money and property from various insurance companies, financial institutions, estates and businesses. California state law requires certain entities to report and submit their customers’ unclaimed money to the controller’s office when there has been no activity on an account for a period of time, usually three years.

The most egregious of Arnold’s individual frauds involved the Farmers New World Life Insurance Company. Farmers issued life insurance policies to an individual who was later murdered. The policyholder’s wife and named beneficiary was deemed ineligible to collect the policy proceeds after she was convicted of conspiring to murder her husband. Farmers attempted, without success, to locate the legal guardians of the policyholder’s children and the proceeds went undistributed to the true owners for four years.

In 2012, Arnold contacted Farmers posing as the executor for the policyholder’s estate. As was common in many of Arnold’s frauds, he claimed Farmers did not possess the estate’s current address because it had been moved and the postal forwarding had expired. He produced false and fraudulent letters testamentary to Farmers to prove his executorship and, in September 2012, received a payout of more than $278,000.

Over a five-year period, Arnold received approximately 442 payments totaling more than $1.5 million. He received proceeds intended for more than 300 different payees and issuedby more than 200 different financial entities, estates and businesses. A total of 49 payments, of the 442, were payable to the estates of deceased persons. Arnold spent at least $500,000 of his criminally-derived proceeds on day-trading, a compulsive form of gambling.

Arnold previously pleaded guilty to one count of mail fraud and one count of money laundering in violation of 18 U.S.C. §§ 1341 and 1957 on June 13, 2018.

USPIS investigated this case with assistance from the Oregon Department of Financial Regulation and the National Insurance Crime Bureau. It was prosecuted by Clemon D. Ashley, Assistant U.S. Attorney for the District of Oregon.

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