Ohio Lieutenant Governor and Department of Insurance Director Mary Taylor announced the department’s top fraud and enforcement cases for 2012.
During the calendar year, the department processed 7,274 allegations of agent misconduct and insurance fraud, initiated 2,310 investigations, identified more than 700 civil and criminal violations of Ohio insurance law, took administrative action against 167 insurance agents and agencies, assessed $134,900 in fines and referred 71 individuals for prosecution.
The Department’s top statewide fraud and enforcement cases for 2012 are:
- Annuities Agent Scams Several Clients – Mansfield, Ohio/Richland County/$1.1 Million: The department revoked the insurance license of Willard Lee in June 2012 after an investigation revealed Lee misappropriated approximately $1.1 million from several clients by withdrawing money from their annuities.
- Agent Fails to Timely Pay Claims – Newton Falls, Ohio/Trumbull County/$50,000: Agent Pamela Priddy was assessed a $35,000 civil penalty and a $15,000 administrative fee in May 2012 after a Department investigation determined Priddy, owner of two third-party-administrator companies, failed to timely pay clients’ claims and withheld administrative charges from claim funds.
- Agent Keeps Client’s Annuity Investment – Lowell, Ohio/Washington County/$30,000: The department revoked the insurance license of Lloyd Carr in December 2012 after an investigation revealed Carr failed to submit a client’s annuity application and investment to the insurer. Carr instead provided the consumer with a fabricated annuity policy, and deposited the consumer’s $30,000 check into his own bank account.
- Unlicensed Person Solicits Life Insurance to Church Members – Lima, Ohio/Allen County: The department issued a cease and desist order to Indiana insurance agent James Beattey in June 2012 after a Department investigation confirmed Beatty solicited members of a small church in Western Ohio to purchase life insurance policies. He was not licensed to sell, solicit or negotiate insurance in Ohio.
- Agent Deceives Clients for Commissions – Portsmouth, Ohio/Scioto County: The department revoked the insurance license of Allen Bell in March 2012 after a Department investigation found Bell forged signatures of six Ohio clients and submitted altered insurance applications for two Ohio clients to secretly earn sales commissions.
- Title Agent Sentenced in Scheme – Copley, Ohio/Summit County/$1 Million: In September 2012, a federal judge assigned to the US District Court of Northern Ohio ordered former title insurance agent Steven Connolly to serve five years in federal prison, three years of post-release control and pay $1 million in restitution. A joint Department and FBI investigation determined Connolly diverted funds from property transactions to his personal bank account.
- Agent Misappropriates Clients’ Funds – Powell, Ohio/Franklin County/$41,000: Former insurance agent Michael Cox was ordered by a Franklin County Common Pleas Court judge in April 2012 to serve three years in prison (increasable up to eight years if the terms of his sentence are not met) and pay restitution after an investigation by the Department and Department of Commerce identified wrongdoing. Cox misappropriated $41,000 in auto and homeowners premiums from clients and used the funds for personal use.
- Agent Diverts Life Insurance Benefits – Marysville, Ohio/Union County/$34,000: Former insurance agent Paul Yocum pled guilty in January 2012 to one count of grand theft after a Department investigation revealed Yocum diverted life insurance benefits from a client for his own personal use. In February 2012, Yocum was ordered by a Union County Common Pleas Court judge to serve 10 days in jail and complete three years of community control.
- Man Sentenced for Arson – Grove City/Franklin County/$8,000: A Franklin County Common Pleas Court judge ordered Michael Boyd, in May 2012, to serve four years in prison and pay $8,000 in restitution after Boyd pled guilty to aggravated arson. A joint investigation by the Department and Grove City Police revealed Boyd paid someone to set his home ablaze in order to collect the insurance proceeds.
- Woman Submits False Invoice to Insurer – Sandusky, Ohio/Erie County/$3,000: In November 2012, an Erie County Common Pleas Court judge ordered Charlene McCormick to serve 90 days in jail, five years community control and pay $3,000 in restitution after McCormick pled guilty to insurance fraud. The conviction was the result of a Department investigation that found McCormick submitted a false invoice to her insurer to make it appear she paid for alleged storm damage to her property.
The Ohio Department of Insurance fraud unit investigates allegations of insurance fraud, such as the submission of false or inflated claims, and works with prosecutors to criminally prosecute those who commit fraud. The enforcement unit investigates allegations of unlicensed insurance activity as well as agent/agency misconduct.
Source: Ohio Department of Insurance