View this article online: https://www.insurancejournal.com/news/east/2012/12/06/273065.htm
A former New Jersey insurance brokerage controller who pleaded guilty to stealing several million dollars is awaiting sentencing scheduled for Dec. 19.
Under the plea agreement, the state will recommend that Kelly Roetto, 45, of Bedminster, N.J., be sentenced to nine years in state prison. In addition, Roetto will be ordered to pay restitution and will agree to never again obtain an insurance license in New Jersey.
Roetto pleaded guilty on Nov. 8 to an accusation charging her with second-degree theft by unlawful taking, second-degree issuing bad checks, and second-degree misconduct by a corporate official before Superior Court Judge Thomas V. Manahan in Morris County.
At the time of the crime, Roetto was the controller for a now-defunct insurance brokerage called the John A. Rocco Co. Inc., located in Florham Park. The brokerage was in the business of obtaining insurance policies on behalf of small and medium-sized trucking, hauling, waste management, moving, and recycling businesses in New Jersey and New York.
As part of its operations, the brokerage arranged for these businesses to finance the cost of such insurance policies, and used its existing relationships with numerous premium finance companies for this purpose. In her capacity as the brokerage’s controller, Roetto was responsible for arranging this financing and for ensuring that the borrowed funds were forwarded from the brokerage’s bank accounts to the insurance carriers or their respective agents.
In pleading guilty, Roetto admitted that between January 2008 and May 2010, she used her position as the controller to steal between $3.8 million and $5 million of financed proceeds. The state’s investigation revealed that Roetto was able to perpetrate these offenses by exploiting the complexity of the premium finance transaction process using a combination of different schemes.
For example, she admitted that she knew that these finance companies sent financed proceeds to the brokerage with the understanding that they would be used to purchase insurance policies on behalf of businesses seeking coverage.
She further admitted that on numerous occasions she failed to send this money to the carriers and, instead, exercised unlawful control over such money by using it for a purpose other than its intended purpose. Roetto also admitted that she caused unauthorized finance agreements to be submitted to these finance companies and that she used the proceeds obtained in connection with these unauthorized agreements for unlawful purposes.
In addition, Roetto admitted that she used her position to issue more than 200 bad checks totaling more than $2 million. These checks were drawn on many of the brokerage’s bank accounts at not fewer than 10 banks.
“This crime attacked the integrity of our insurance system by deceiving both companies seeking insurance and companies that finance such insurance,” New Jersey’s Acting Insurance Fraud Prosecutor Ronald Chillemi stated. “Such crimes warrant vigorous prosecution and serious sanctions.”