The former owner of multiple property/casualty insurance operations in northern Illinois has been sentenced to more than four years in prison and ordered to pay nearly $1 million in restitution for insurance fraud.
U.S. District Judge Frederick J. Kapala on Aug. 15 sentenced Todd J. Fendler, 42, of Rockford, Illinois, to 50 months in federal prison and three years of supervised release.
Fendler, formerly a licensed insurance producer who owned Surplus Market Solutions LLC, Northern Underwriting Managers Inc., Northern Illinois Insurance Billing Services and Northern Illinois Insurance Agency Inc., also was ordered to pay $965,879.63 in restitution to his victims.
Fendler pleaded guilty to one count of mail fraud on Jan. 17, 2018, following a lengthy investigation into alleged activities intended to defraud more than 100 former insurance clients. At one point, Fendler faced an indictment that charged him with 19 counts of wire fraud and one count of mail fraud in connection with his alleged fraudulent schemes. He was first indicted in March 2017; an indictment handed down in August 2017 superseded the previous indictment.
Complaints filed by former clients of Fendler and his insurance organizations with the Illinois Department of Insurance and the Missouri Department of Insurance alleged that Fendler and his company had a pattern of wrongly debiting funds from client accounts electronically, via Automated Clearing House (ACH) withdrawals, without authorization. Accounts were allegedly debited even when premiums had previously been paid or the policy had been cancelled.
Even after having had his producer licenses revoked in 2014 and 2015 by the Illinois and Missouri insurance departments, Fendler continued to operate his businesses by taking advantage of legal appeals processes. In July 2016, Anjali Julka, a spokesperson for the Illinois Department of Insurance, told Insurance Journal that while the licenses of NUM and that of its owner Todd J. Fendler were revoked, the revocation orders had been “stayed by operation of law.”
Reporting on Fendler’s sentencing, the U.S. Attorney’s Office for the Northern District of Illinois said a written plea agreement confirmed Fendler obtained bank account information from businesses and individuals who had applied for insurance policies through Fendler’s companies. He then used victims’ bank account information to create fictitious electronic checks purportedly issued by the victims and payable to Fender and his companies.
Fendler made unauthorized electronic withdrawals from client bank accounts, as well as bank accounts of insurance agents and agencies with which he did business.
Fendler and NUM at one time advertised with Insurance Journal and its affiliate, MyNewMarkets.com. IJ first became aware of the situation via complaints submitted to both sites that mirror those described in the indictment and plea agreement.
The U.S. Attorney’s Office and of the U.S. Postal Inspection investigated Fendler’s case.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. Assistant U.S. Attorneys John G. McKenzie and Scott R. Paccagnini represented the government in its case against Fendler.
According to the Rockford Register Star, Fendler still faces charges in Jasper County, Missouri, for allegedly passing bad checks.
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