The U.S. Federal Northern District Court has sentenced former insurance agent Richard S. Zureich of Cleveland to two years in prison and ordered him to pay $560,000 in restitution and approximately $250,000 to settle all civil suits against him.
Ohio Insurance Commissioner Lee Covington previously revoked Zureich’s insurance license and warned insurance consumers about policies obtained from the fraudulent Spectrum Insurance Company, which Zureich illegally operated. According to the Ohio DOI, Zureich represented himself as an agent and owner of Spectrum Insurance, knowing that Spectrum Insurance was not a licensed corporation authorized to underwrite homeowners’ insurance in the state of Ohio.
A joint investigation of the Ohio Department of Insurance, the New Brunswick Police Department and the FBI found that between May 1, 1997 and July 31, 2000, Zureich sold Spectrum Insurance to approximately 200 individuals. Zureich received an average premium payment of $500 per policy.
Zureich would collect insurance premium payments from a mortgage company on behalf of an individual but would not obtain insurance or return premium payments. Zureich would then issue a declaration of insurance page from Spectrum Insurance showing insurance coverage had been placed on an individual’s property. Since Spectrum, the company listed on the declaration page, does not exist as an insurance company, no coverage was provided for the property.
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