View this article online: https://www.insurancejournal.com/news/east/2006/10/20/73451.htm
A former executive at Beacon Mutual Insurance Co. in Rhode Island was indicted this week on charges of conspiracy and insurance fraud related to an investigation into the state’s dominant workers’ compensation insurer.
David Clark, 57, of Warwick, was the company’s former vice president for loss prevention and underwriting until he was fired last April along with Beacon’s former chief executive, Joseph Solomon.
A report commissioned by Beacon and released last spring said the company gave certain companies preferential rates on workers’ compensation policies. The report also found that Beacon had maintained “inappropriate relationships” with a group of insurance agents and their clients.
Clark is the first Beacon official to face any criminal charges. A phone message left with a David Clark in Warwick was not immediately returned Wednesday.
“This investigation speaks to allegations of a betrayal of trust by and a display of favoritism on the part of Beacon’s senior management,” Attorney General Patrick Lynch said in a statement announcing the indictment, adding that his office’s investigation was far from over.
Clark’s attorney, Thomas Briody, said his client was wrongly fired and is innocent.
“Mr. Clark is a very decent man caught up in terrible circumstances,” Briody said. “He denies any criminal conduct, and we look forward to addressing these charges in court.
Lynch said that Clark was accused of scheming to commit insurance fraud and then engaging in a “failed” cover-up attempt last February.
A statewide grand jury indicted Clark on one count of accessing a computer for fraud; one count of intentionally accessing a computer to alter, damage, or destroy data; one count of conspiracy to commit computer crime; one count of insurance fraud; and one count of conspiracy to commit insurance fraud.
The indictment also refers to an unindicted co-conspirator, who is not named.
“The fact that there is an unnamed, unindicted co-conspirator evidences that there is more work to be done,” Lynch told The Associated Press, explaining why he could not speak more explicitly about the allegations against Clark.
The Beacon board voted last April to fire Solomon and Clark not long after the committee’s report, which the company had commissioned, had been made public.
Republican Gov. Don Carcieri, who had pushed for a change of leadership at the company and demanded the resignation of several board members, called the indictment an “important step in cleaning up the mismanagement and the misdeeds that have plagued Beacon Mutual.”
“Since the allegations of mismanagement at Beacon Mutual were first brought to my attention, it has been very clear that the company had abandoned its mission of serving the needs of Rhode Island businesses and instead operated for the benefit of company insiders and friends,” the governor said.
Clark is to be arraigned in Kent County Superior Court on Oct. 27.