New Jersey Woman Sentenced to Four Years in Prison for Insurance Fraud

July 1, 2019

A Bergen County, N.J., woman has been sentenced to four years in prison for filing phony insurance claims for losses she purportedly sustained during Superstorm Sandy and for filing a false bankruptcy application to shed $175,000 in debt.

Katreecea Cline, 49, of Elmwood Park was sentenced in accordance with a plea agreement reached when she pleaded guilty to two counts of second-degree insurance fraud and one count of second-degree fraud by insolvency on February 13. The sentence was handed down by Superior Court Judge James J. Guida in Bergen County.

“Today’s sentencing makes it clear that we will not allow individuals to undermine the integrity of the insurance system, especially in the aftermath of a natural disaster like Superstorm Sandy,” said New Jersey Attorney General Gurbir S. Grewal. “Fraudulent claims not only steal money meant to cover legitimate losses, they force genuine victims to wait longer for their claims to be processed.”

In pleading guilty, Cline admitted she submitted fake and altered receipts to her insurance company supporting claims alleging that items in her apartment in Elmwood Park, in her son’s dorm room in Harrison, and stored at her brother’s home in Keansburg were damaged as a result of Superstorm Sandy. Cline collected a total of $53,800 on those fraudulent claims.

“We will continue to investigate and pursue harsh punishment for insurance cheats who illegally profit from catastrophic events,” said New Jersey Acting Insurance Fraud Prosecutor Tracy M. Thompson. “We want to send a message of deterrence that will reduce this kind of criminal conduct in future emergencies.”

On November 25, 2012, Cline and her husband Stevie Mitchell signed a United States Bankruptcy Court voluntary petition for bankruptcy. In that application, the couple asserted that they were $209,874 in debt to various creditors and had only $36,905 in assets.

Cline admitted that in filing the bankruptcy application, she failed to report that the couple had property interest in the outcome of the USAA claims regarding Superstorm Sandy and that they had a bank account with financial institution Metabank. On February 22, 2013, a federal bankruptcy court judge accepted the couple’s bankruptcy petition and discharged approximately $175,000 worth of debt.

Charges filed against Mitchell in connection with the fraudulent bankruptcy application have been dismissed.

Source: New Jersey Office of the Attorney General

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