Louisiana Court Orders Injunction Against Insurance Fraud Ring

Insurance regulators in Louisiana say a court has ordered a permanent injunction against members of an insurance fraud ring, banning them from further involvement in the insurance business in that state.

Louisiana Insurance Commissioner Jim Donelon announced that the Nineteenth Judicial District Court of Louisiana granted a summary judgment in favor of the Louisiana Department of Insurance, Great Southern Dredging Inc. and Entek Mechanical Corporation and against defendants United Assurance Company Ltd., AA Communications Inc., and James Zoucha, Cong Li and Gwen Moyo in a case involving bogus construction bonds.

The defendants were issued a permanent injunction and required to cease and desist from all insurance activities in Louisiana.

In addition to the permanent injunction, the defendants were ordered to make restitution to Great Southern Dredging Inc. in the amount of $365,555.00, make restitution to Entek Mechanical Corporation in the amount of $187,018.35, pay $19,293.30 in premium taxes and penalties due on premiums received from Great Southern Dredging, put up a $50,000 bond to come into court, pay attorneys’ fees incurred by LDI of $120,577.40, pay fines and penalties of $50,000 and pay all court costs and judicial interest.

Moyo was convicted in October 2008 on 41 counts of fraud, conspiracy and money laundering for selling bogus construction bonds and pocketing approximately $2 million in the process. She was sentenced to 20 years in prison ordered to pay approximately $2.4 million in restitution to three of her victims, including a West Memphis, Ark. church.

Moyo was convicted in Arizona in 1989 on similar charges, the insurance department said.

Zoucha, of Oceanside, Calif., pled guilty in May 2009 to charges stemming from the money laundering case against Moyou. He was ordered at that time to pay about $321,000 in restitution.

Former Louisiana state Sen. Derrick Shepherd pleaded guilty in 2009 to a charge of conspiracy to launder money from Moyo’s sale of bogus construction bonds.

‘I’m delighted with the success of this motion, which has proved to be very protective of Louisiana citizens, both at Great Southern Dredging and in St. Tammany Parish,’ said Commissioner Donelon on this ruling. ‘Our intent was to prevent those involved with this insurance fraud ring from harming others in Louisiana. Crime like insurance fraud does not pay.’

Construction bonds are a type of insurance that pays to complete construction projects if contractors fail to complete the specified job or fail to pay subcontractors. Donelon warns that the only way a political subdivision, or any other owner for that matter, can be certain that a person giving a bid bond, payment bond, and/or performance bond is legitimate is to contact LDI’s Office of Licensing and Compliance and have the staff look up the entity and give the verification needed.

Topics Fraud Louisiana Construction