The Tennessee Department of Commerce & Insurance (TDCI) announced disciplinary actions against two Tennessee licensees for several violations including the knowing misappropriation and conversion of moneys and property; failure to report criminal prosecution pretrial hearings to TDCI; violating laws of the commissioner; and the use of fraudulent and dishonest conduct in the business of insurance.
The punishments were the result of work by TDCI’s Insurance Fraud Investigations team.
“Agents have a fiduciary duty to their clients who place the utmost trust and confidence in their agent to manage and protect their money and property” said TDCI Assistant Commissioner for Insurance Michael Humphreys. “The Department will continue to take action against agents who violate this trust. We are making every effort to ensure that consumers can count on licensed agents in Tennessee to act in their best interest. Anything less will not be tolerated.”
Details of the cases include:
Janet F. Leathers of Madison, Tenn., had her license revoked and was assessed a $176,000 civil monetary penalty by final order, effective December 30, 2015, as a result of a May 7, 2015 hearing by an administrative law judge. The ALJ found Leathers to have committed a total of 44 violations of Tennessee insurance law. Specifically, the ALJ found 42 knowing violations for the misappropriation and conversion of moneys and property, and engaging in fraudulent and dishonest conduct. In addition, the ALJ found Leathers to have committed two violations for failure to inform the Department of her criminal prosecution. The violations stemmed from Leathers’ fraudulent conduct during her appointment as an insurance broker for Blue Cross Blue Shield (BCBS) in 2009, which subsequently led to her criminal indictment.
As an agent for BCBS, Leathers used stolen prescription form pads to forge and submit prescriptions for controlled substances using names of her BCBS clients as well as forging doctors’ signatures. The forgeries persisted over a five-month period and were found by the ALJ to constitute 42 knowing violations of the law. In 2011 Leathers was criminally indicted for the forgeries, and ultimately received judicial diversion in 2012. She was sentenced to three years of supervised probation, a $2,000 fine, and $5,539.60 in restitution. At no point did Leathers inform TDCI of her pending prosecution as required by law.
Marvin Lenard Berry of Shelby County, Tenn., had his license placed on a one year probation and was assessed a $2,000 fine and restitution payment to the victims totaling $433.15 after a consent order was finalized, effective March 2, 2016, between TDCI and Berry. The consent order was entered into as a result of Berry’s misconduct as an appointed agent for Monumental Life Insurance Company. In 2011 Berry misappropriated collectively $443.15 in premiums from two separate victims and failed to remit the money to Monumental as a premium payment on behalf of the clients.