Couple Stole $17 Million From Agency, Feds Charge

An Arlington Heights, Ill., agency was bilked out of more than $17 million by its senior marketing vice president and his wife, who tried to launder the money, according to a U.S. grand jury indictment.

Robert S. Carter, 58, was charged with eight counts of mail fraud and four counts of tax fraud for allegedly concocting an elaborate scheme to steal the money from National Accident Insurance Underwriters Inc., an agency based in the Chicago-area suburb. Carter's wife, Virginia, 59, was charged with 23 counts of money laundering, according to the U.S. attorney's office.

Carter, who lives with his wife in the Chicago suburb of Highland Park, allegedly stole the money by diverting premiums to an account he controlled and creating bogus premium reports for lesser amounts.

Virginia Carter, meanwhile, is accused of using the funds to buy high-value goods such as jewelry in an attempt at money laundering. The couple will be arraigned at a later date.

Minn. Insurance Regulator Pushes for Fraud Unit

Commissioner Glenn Wilson is attempting to get legislators to establish an insurance fraud prevention unit within his department, according to the Minneapolis Star-Tribune. A bill doing just that passed the Senate Commerce Committee.

Minnesota is one of nine states that does not have such a unit, according to the Coalition Against Fraud. Wilson said an aggressive fraud unit might be able to lower insurance companies' costs and put a damper on premium increases. According to the Insurance Federation of Minnesota, fraud costs the average family $1,000 a year in auto and home insurance premiums.

The legislation Wilson is pushing would operate similarly to fraud units in many other insurance departments, with full-time investigators working as a separate police unit. Insurance companies would pay the bill, with annual fees of $400 to $4,000 depending on their size, according to the Star-Tribune.

Toledo Man Gets 30 Days for Comp Fraud

A Toledo man has been sentenced to 30 days in jail for committing workers' compensation fraud, according to the Ohio Bureau of Workers' Compensation.

William Douglas was sentenced to 30 days jail time, two years community control, court costs and restitution in the amount of $2,534.76.

BWC's special investigations unit (SIU) was alerted by an automated detection and intelligence team search that showed Douglas was receiving wages while collecting workers' compensation benefits. During the investigation, the SIU revealed that Douglas was an employee at Atlas Paving, Raceway Park and Cappelletty Asphalt Repair.

Douglas' original injury occurred in June 2000. He worked for Foster Wheeler Zach and lost footing at a construction site and twisted his back. BWC allowed the claim and began providing him temporary total benefits and 30 days of living maintenance.

Ill. High Court Tosses Out Fraud Claim for Lack of Proximate Cause

The Illinois Supreme Court last week reversed an appellate court decision and reconfirmed that deceptive advertising cannot be the proximate cause of damages under the Illinois Consumer Fraud Act (ICFA) unless it actually deceives the plaintiff.

"The high court ruling reaffirms the original intent of the fraud law, which was not to provide an opening for meritless lawsuits asserting ICFA claims," said Laura Kotelman, regional manager and senior counsel for the Property Casualty Insurers Association of America (PCI), which had filed an amicus brief in the case.

The judgment came in the class-action case of Shannon v. Boise Cascade, in which several homeowners claimed that Boise Cascade, a manufacturer of wood siding, had practiced consumer fraud and deceptive business practices in advertising that its product was of good quality although the plaintiffs experienced problems with the product. However, all plaintiffs reportedly admitted they had not received any representation from Boise Cascade and that in fact some of them had purchased homes with the siding already installed.

In its amicus brief, PCI maintained that the appellate court's decision would not only create a windfall for people who were not misled or deceived in any way, but would eliminate sensible limits that courts and legislatures have placed on false advertising claims.

The Supreme Court reversed the appellate court decision, stating that there was no genuine issue of material fact that the plaintiffs were damaged because of Boise Cascade's alleged deceptive advertising and reaffirmed the original court's summary judgment for the defendant on the consumer fraud count.