North Carolina Insurance Commissioner Wayne Goodwin says that $6.5 million will be returned to 661 former members of the Phoenix Fund Inc., a self-insured workers’ comp fund that was put into rehabilitation nearly three years ago.
Phoenix was ordered into rehabilitation in October 2006, after the Department of Insurance uncovered a $20 million fraudulent reinsurance scheme that left several insurance entities, including the Phoenix Fund, without reinsurance.
Since the Fund was put into rehabilitation, regulators have recovered nearly $18 million for the Phoenix Fund from Thomas G. Reitz, the reinsurance broker at the center of the fraudulent reinsurance scheme.
Reitz pleaded guilty to mail fraud and money laundering and was sentenced in 2008 to 70 months in jail, followed by three years of supervised release. He was also ordered to pay over $19 million in restitution to the Phoenix Fund.
Distribution checks were set to be mailed earlier this week to employers that were participating members of the Phoenix Fund as of Oct. 17, 2006. The remaining recovered money will be used to pay the fund’s obligations.
Source: North Carolina Department of Insurance
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