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State Fund In For Three-Pronged Probe

The heat on State Compensation Insurance Fund was turned up a notch or two yesterday upon the announcement of a task force that will conduct a three-pronged probe into alleged criminal misconduct by former employees of the insurer. The task force includes investigators from the California Department of Insurance, the California Highway Patrol and the San Francisco District Attorney's Office.

The task force will be in addition to the CDI's own "review" of the organization, which has been ongoing since April. State Fund itself has been conducting its own internal investigation. The fallout from the way State Fund managers handled its group program business and the cronyism involved has already led to the termination of State Fund president James Tudor and vice president of group business Renee Koren. Now criminal charges could be in the offing depending on the results of the new task force investigation.

In a news release yesterday, the CDI said that State Fund in May had provided information from its internal investigation, "which raised concerns of potential improprieties of former employees."

The Highway Patrol, which has been involved in the investigation notes that State Fund has been cooperative throughout.

The CDI will continue with its own audit and investigation of State Fund independent of the task force, the findings of which will be released this fall.

And that, as they say, is -30-

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