Transfer of FGS Assets Blocked
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LOS ANGELES — Acting at the request of Insurance Commissioner John Garamendi, a Superior Court judge Thursday temporarily blocked the transfer of assets of FGS Insurance Agency Inc. following its sale to a Laguna Hills company.
The state Insurance Department has filed a civil lawsuit against Irvine-based FGS, accusing the firm of racketeering, gross mismanagement and breach of fiduciary duties. The agency has demanded that FGS, one of the state’s largest high-risk auto insurers, stop selling insurance and has begun proceedings to revoke the company’s license.
Garamendi said in a statement Thursday that he was seeking a temporary restraining order to freeze the transfer of FGS’s assets after learning that FGS had been sold to Ciocatto Insurance Services Inc., a Laguna Hills agency owned by Al Ciocatto.
Judge William Russ granted the order, which prevents the use of the proceeds of the sale and also orders that all records of the transaction be preserved. In the event the sale is not yet completed, the order asks the court to halt the sale.
Garamendi said he was “delighted” by the judge’s order.
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