An investigation initiated by the Ohio Department of Insurance led to a 16-count federal indictment yesterday of Robert J. Lucia, former CEO of Beachwood, Ohio-based Credit General Insurance Co., for alleged bank fraud, money laundering, and filing false income tax returns, a statement released by the department claimed.
Lucia allegedly diverted millions of dollars from Credit General—money which should have been applied to company operations, including paying policyholder claims.
“Lucia is alleged to have engaged in a scheme to divert funds and to conceal wrongdoing from regulators for years, which ultimately led to the fall of Credit General Insurance Company and serious harm to policyholders,” Insurance Director Ann Womer Benjamin said. “The Department is committed to this ongoing investigation and we will continue to pursue court actions against other Credit General wrongdoers for the benefit of its policyholders.”
After concluding a financial exam of Credit General in late 1999, the Department became aware of suspicious record-keeping and management practices and launched an intensified investigation of the company in early 2000. Credit General was initially placed in supervision in June 2000 and then in rehabilitation in November 2000, a more stringent level of intervention by the Department.
Information collected during the investigation was forwarded to the U.S. Attorney for the Northern District of Ohio for criminal prosecution in January 2001, the same time the company was placed in liquidation. The Federal Bureau of Investigation and the Internal Revenue Service also joined the investigation.
The department is continuing its efforts to identify all liabilities, assets, and creditors belonging to the estate of Credit General.