The Leavitt Group acknowledged this week that the managing co-owner in its Albuquerque office was dismissed on Sept. 23 for reported misrepresentations made in proposals to 20 current or former clients over a six-year period.
Leavitt Group of Albuquerque specializes in selling insurance to New Mexico-based Native American tribes, pueblos and related enterprises. The 20 clients or former clients affected are associated with seven tribes or pueblos.
According to Leavitt Group counsel, Mike Chidester, the misrepresentations were made in annual insurance renewal proposals in which a recommended legitimate insurance quote was contrasted with one or more falsified comparison quotes. The falsified comparison quotes were reportedly higher in cost than the legitimate recommended quotes. The falsified comparison quotes either were never issued by cited insurers, or were inflated by the dismissed individual so as to appear noncompetitive.
Chidester indicated that the misrepresentations “harmed clients by creating a false appearance of competition and service, and by unfairly guiding client choice.”
The problems were brought to light on Sept. 15 by a former Leavitt Group of Albuquerque client advising the Leavitt Group’s parent company, Leavitt Group Enterprises, of irregularities in a past renewal quote presented by the managing co-owner.
An internal investigation was conducted by Leavitt Group Enterprises between Sept. 15 and 26. The audit reportedly confirmed that misrepresentations in quoting had occurred with respect to the reporting former client, and also with respect to additional past and present clients.
The Leavitt Group reported the misrepresentations to the New Mexico Insurance Department on Sept. 26, and has promised to deliver a full report to the department by Oct. 11.
On Sept. 27 through 29, Dane Leavitt, the Leavitt Group’s CEO, joined by others from the organization, met separately with each of the clients and former clients harmed, informed them of the misrepresentations, provided copies of audit findings, and discussed related matters.
Leavitt indicated, “We have sought to swiftly determine what happened, tell clients and regulators what happened, apologize, set things right, and put and retain in place people who will serve clients fairly in the future. It will take some time to resolve these breaches of trust – but we will. We regret what happened. This circumstance is not a fair reflection of the more than 1,000 Leavitt Group associates who fairly and professionally honor the trust extended by our clients, including the wonderful remaining employees in the Albuquerque office.”
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