Painting a Picture of ‘Being Framed’

Even after her capture and seven months of living on the lam, Kimberly Morgan claimed she was “being framed” when a CDI investigator began probing allegations in 1999 that she was involved—along with her husband, Robert Morgan—in an alleged $10.3-million insurance fraud in San Jose.

The Morgans owned the failed ISU Diligent Insurance Agency Inc. The state closed ISU Diligent a year ago after an investigation indicated that Robert, who ran the commercial side of the business, allegedly stole heavily from more than 700 individuals and firms by issuing phony policies, pocketing premiums and borrowing on customers’ accounts without their knowledge.

The couple then fled to the Caribbean Island of St. Lucia with their two small children and the children’s nanny, but were captured on Aug. 4. Before fleeing to St. Lucia, Kimberly allegedly obtained the birth certificates for Randy and Jeanne Kaneyuki and their children, and of another person, Carolyn Blonde Martin.

Kimberly accused David Fortman, state insurance investigator, of manipulating her words and actions as she tried to revive the troubled agency, making it appear she was also involved in the fraudulent activities to which her husband had confessed. Fortman said he last spoke with Kimberly on Sept. 16, 1999, the day the Department ordered ISU Diligent shut down.

Kimberly took care of personal lines, administrative duties and staff training for the company. During the joint state-county investigation last fall, Fortman found strong indications that she knew of her husband’s alleged illegal activities, participated in some of the commercial lines business and allowed Robert to continue working there even after she was warned and he was stripped of his license.