Insurance Buyers Beware – All May Not Be As It Seems
A large number of Insurance buyers were recently swindled in scam. While reading a recent issue of Business Insurance, I couldn’t help but read the article on the front page with the headline “Insurance buyers swindled in scam, prosecutors charge. The feds are accusing the defendants of selling bogus liability coverage.”
Three defendants, who are all named in the article, include an accountant in St. Kitts, West Indies, and brokers in both Texas and Quebec. The indictment was brought in U.S. District Court in Houston and accuses these defendants of issuing policies to nursing homes, apartment complexes and other businesses all across the country, and for providing bogus financial and reinsurance information to policyholders.
One of these policyholders was the operator of a tour boat that capsized killing 20 tourists. Allegedly, the claims were denied for the accident by the backdating of documents to make it appear that there was never coverage placed.
According to the article some of the accused have been arrested. However, there are at least three under indictment who are among the missing and are named in the article along with a plea from the feds for help in locating them.
Besides issuing fake policies, providing worthless Eurobonds, and backdating documents, one member of this group is also alleged to have tried to pressure his daughter into lying to a grand jury investigating the case. Her name had been forged as claims manager and her father wrote her a lengthy note telling her just how to answer the grand jury’s questions.
As a whole, and if convicted, this illustrious group faces statutory maximum sentences of 20 years per count on one count each of conspiracy and money laundering and nine counts of wire fraud. Separately, one of the defendants also faces 20 years on an obstruction of justice charge.
Good luck to the feds! I hope they find them all, try them all and see how it all shakes out.