Two Charged in 6-Year Fraud Scheme Against Insurance Agent Group, MDRT

December 6, 2010

Bond has been set at $1 million for two Illinois men charged with bilking an insurance industry association out of more than $1 million in a scheme that spanned six years, officials said.

The allegations involve an information technology manager and an accomplice who worked for the Illinois-based Million Dollar Round Table (MDRT) association of life insurance producers.

Cook County State’s Attorney Anita Alvarez reported that Harvey Cruz, of Plainfield, and James Lurito, of Algonguin, are each charged with one count of felony theft in excess of $500,000. Cruz is also facing an additional charge of organizing a continuing financial crimes enterprise.

According to prosecutors, Cruz was the information technology manager for the MDRT, hose membership includes more than 30,000 of the top life insurance producers worldwide. The agency conducts training seminars for members and also supports a philanthropic foundation.

Cruz had worked for MRDT for nine years before advancing to become the association’s IT manager. In 2003, prosecutors allege that Cruz devised an embezzlement scheme and recruited Lurito, who operated an independent IT consulting firm, to participate. To facilitate the scheme, prosecutors allege that Lurito would submit phony bills for technology work which would be personally approved by Cruz. Per their arrangement, Lurito would then transfer 90 percent of the funds to Cruz or a company he controlled and keep the remainder for himself. Prosecutors allege that the thefts occurred between 2003 and 2009 and totaled more than $1.1 million.

In 2009 the fraudulent payments were discovered and the organization contacted the Park Ridge Police Department and the Cook County State’s Attorney’s Office Public Corruption and Financial Crimes Unit.

Cruz and Lurito were arrested appeared in bond court at the Cook County Criminal Courthouse in Skokie, where Judge Timothy Chambers set bond for each man at $1 million, officials said. The next court date in the case has been set for Jan. 3.

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