‘Well-to-Do’ Investment Firm Head Charged in $300,000 South Florida Insurance Fraud

By | June 23, 2022

The head of a small, South Florida investment firm has been charged with insurance fraud after he submitted a $300,000 roof-leak claim to his insurer, American International Group, along with allegedly fake photos of mold and other damage to his house.

Michael DeGeorge, 38, of Palm Beach Gardens and Jupiter, Florida, was arrested Tuesday after a months-long investigation by the Florida Department of Financial Services’ fraud bureau. The arrest was announced Wednesday by Florida Chief Financial Officer Jimmy Patronis, head of DFS.

“Insurance fraud has no place in the state of Florida and my fraud detectives are working hard on behalf of Floridians to ensure that fraudsters are arrested and brought to justice,” Patronis said in a statement. “Unfortunately, it’s schemes like these that cause insurance premiums to rise and make home insurance unaffordable.”

DeGeorge and his attorney could not be reached Thursday. He appears to be well connected in South Florida. The Florida Secretary of State corporations records show him as president of MDeG Investment Group, headquartered at the home in Jupiter for which the claim was made. And a jeweler that sold him a Rolex watch said DeGeorge belongs to “a very well-to-do family,” according to the arrest affidavit that details the investigation.

DeGeorge also has filed a lawsuit against several contractors who built or worked on the upscale home for which he made the leak and mold insurance claim, court records and the arrest affidavit indicate. The complaint alleges extensive problems with the house and mold, which affected DeGeorge’s child’s health.

Two defendants have asked the circuit court in Palm Beach County to dismiss the suit.

The arrest record explains how DeGeorge made the insurance claim, and how AIG investigators became suspicious. In January 2020, DeGeorge reported the problems to AIG, claiming that mold was present everywhere in his home, due to a roof leak. It was so bad that he said his family had to move out of the home and he had thrown away many of his belongings.

AIG asked him to submit photographs of the contents and mold damage, and DeGeorge provided some 300 pictures, investigators said. The items, which DeGeorge listed on a computer spreadsheet, included furniture, artwork, electronics, clothing, toys, curtains, rugs and more.

But AIG representatives, including an AIG subrogation attorney, noticed that some things weren’t quite right. DeGeorge had filed a similar claim on the property a few years before, had not allowed the contents to be inspected, claimed that he had thrown them out, and submitted photographs of the alleged damage. AIG paid $196,413 on the earlier claim.

AIG’s special investigation unit determined that the 2020 claim included some of the same items listed in the previous claim. And metadata analysis of the photographs showed that some were taken after he said he had discarded the items, while other photos of structural damage were shot as much as 18 months before the alleged date of the loss, the arrest information shows.

Some of the photos were from a real estate website, some appeared to be from other properties, and others were ones that were submitted in the previous claim, investigators reported. Many images showed no water damage.

“Given these facts, Mr. DeGeorge made a material misrepresentation to AIG in support of his homeowner’s claim,” reads the arrest affidavit, signed by DFS fraud detective Kassandra Grimmett.

DeGeorge also claimed the Rolex watch was valued at $35,000 and was so damaged that it had to be thrown away. The investigator interviewed the Boca Raton jeweler who sold him the watch. He said that DeGeorge had brought the watch in to be appraised in 2017, and gave no explanation for why the appraisal was needed. The jeweler appraised it at $25,000 and expressed shock that anyone would throw a Rolex away – the diamonds alone were worth a great deal.

DeGeorge and his wife did not show up for an examination under oath in 2021, and AIG denied most of the claim. It had earlier paid living expenses when the family said it moved out of the home.

AIG referred the case to the DFS fraud bureau in May 2021.

DeGeorge was released Tuesday from the Palm Beach County jail on a $3,000 cash bond.

Topics Florida Fraud

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