SANTA ANA — A former Lake Forest insurance broker pleaded guilty Thursday and was immediately sentenced to three years of probation for stealing about $183,000 in an insurance premiums, exposing victims to the danger of uninsured losses.

Karen Marie Dondanville, 56, pleaded guilty to 90 counts, mostly felonies, including grand theft, theft from an elder, fraudulent insurance benefit claims, assisting in a false claim, making false entries in records or returns, and forgery. She also admitted sentencing enhancements for property damage exceeding $65,000 and aggravated white collar crime between $10,000 and $500,000.

Dondanville accepted a plea deal with prosecutors, her attorney, Fred Fascenelli, said.

“Now she can make strides to make these people whole,” Fascenelli said of her remaining free of custody. “With her being on probation everyone benefits… The goal usually is you want to compensate the victims.”

He said personal problems contributed to sloppy oversight that prompted the criminal case.

The California Department of Insurance said Dondanvile was ordered to pay $335,349 in restitution to the victims, which includes payments to victims who had uncovered losses as a result of Dondanville’s theft.

Dondanville’s insurance broker license was revoked by the state in November 2019, according to California Department of Insurance investigator Braelyn Velasco in court papers.

She stole $183,074 from January 2012 through January 2020 in “payments, insurance premiums and return premiums from 32 customers through the use of fraud, misrepresentation and forgery,” Velasco said in court papers when the case was filed in 2021.

She provided customers fraudulent insurance documents to bill for excessive premiums, and at times provided proof of insurance to mortgage companies when the customers had none, Velasco stated.

The defendant received and deposited premium payments from victims and “failed to remit all — if any — of the premiums to the victims’ insurance companies, thus depriving the victims of their insurance benefits and exposing them to potential uncovered loss,” the investigator said.

“Dondanville manipulated victims’ insurance policies in order to steal premium refunds,” Velasco said. “Dondanville changed victims’ mailing addresses on insurance policies to her own mailing address without the victims’ knowledge or authorization.”

She also allegedly forged victims’ signatures on documents she submitted to insurance companies that requested the victims’ policies be canceled and premiums be refunded to her, and the investigator found that Dondanville also submitted insurance applications for victims’ properties that contained false information in order to steal premium refunds.

She also “substantially exaggerated a victims’ property dwelling, in order to increase the policy’s premium,” Velasco alleged. “Once the insurance company received the premium from the victims’ mortgage account, Donadanville requested the insurance company lower the dwelling amount and issue a premium refund, which Dondanville would divert to herself.”

Three of the victims were older than 65, Velasco said.

Even after her license was revoked, the defendant carried on with her business, Velasco said.

“One of Dondanville’s victims experienced substantial losses that were not covered by an insurance policy, despite the fact the victim paid Dondanville for the insurance policy and that Dondanville provided proof of insurance,” Velasco said. “The victim did not discover the proof of insurance was fraudulent until after the victim experienced the loss.”

The Orange County Register contributed to this story.

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