A federal grand jury in Chicago recently charged 23 defendants with participating in a fraud scheme through which they allegedly swindled 10 life insurance carriers out of at least $26 million in fraudulent benefits.
The defendants submitted fraudulent applications to obtain life insurance policies in the names of various individuals and then induced the carriers to pay death benefits by knowingly misrepresenting the identity of a different deceased person as the insured, according to an indictment unsealed June 2 in U.S. District Court in Chicago.
The fraud scheme charged in the indictment began in 2013 and continued until last month. Among the defendants are sets of spouses and, in some cases, their children, as well as an insurance agent who owned a side business that performed medical examinations on applicants for term life insurance policies. The indictment seeks forfeiture from the defendants of at least $26 million in alleged ill-gotten gains, as well as nine luxury automobiles, eight Rolex watches, and properties in the Chicago suburbs of Orland Park, Bridgeview, and Burbank.
The indictment charges the 23 defendants with multiple counts of wire and mail fraud. Most of the defendants were arrested June 2 in Illinois and Florida and will be making initial appearances in federal courts in Chicago, Orlando, Tampa, and Miami.
The indictment and arrests were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; and Nicholas A. Pecora, Jr., Chief of the Arlington Heights, Ill., Police Department. Valuable assistance was provided by the Cook County State’s Attorney’s Office, U.S. Marshals Service, and United States Attorney’s Offices for the Middle and Southern Districts of Florida. The government is represented by Assistant U.S. Attorneys Philip N. Fluhr and Andréa L. Campbell.
“The fraud scheme charged in the indictment involved an elaborate deception perpetrated against multiple insurance companies for the purpose of financial gain,” said U.S. Attorney Lausch. “I commend the FBI Chicago Field Office and the Arlington Heights Police Department for their diligent work in uncovering this complex scheme and seeking to hold the defendants accountable for their personal and economic harms.”
The charges allege that the defendants paid premiums on the fraudulently obtained policies for two years, at which time the period for contestability expired, making it more difficult for insurance companies to decline death benefit claims. Fraudulent claims for death benefits would then be submitted, using records that falsely identified a different deceased person as the insured, the indictment states. To support the fraudulent claims, the schemers obtained false death certificates in the names of the insureds and made false representations about the deceased person to law enforcement, first responders, medical personnel, funeral home staff, and cemetery employees, the charges allege.
“We will not allow deceitfulness to prevail for selfish financial gain,” said FBI SAC Buie. “The FBI is proud to work with our local law enforcement and prosecutorial partners to fight these extravagant fraud schemes and ensure justice is served.”
“The Arlington Heights Police Department is proud of the results achieved by detectives and agents who investigated this multistate fraud scheme involving a structured plan designed to defraud numerous insurance companies,” said AHPD Chief Pecora. “This investigation is a clear example of local and federal partners working in collaboration to defeat the criminal element and halt their unlawful activity.”
Charged in the indictment are James Mills, also known as “Jamie Montes,” 47, of Oak Lawn, Ill., Joseph Brown, 50, of Chandler, Ariz., Juley Ely, 47, of Oak Lawn, Ill., Ginger Ely, 26, of Oak Lawn, Ill., Sylvia Evans, 48, of Kissimmee, Fla., Holly Stergo, also known as “Holly Stego,” 29, of Missouri City, Texas, Jessica Vaca, 51, of Deerfield Beach, Fla., Angela Becha, 30, of Fort Lauderdale, Fla., Frank Costello, 44, of Hoffman Estates, Ill., Joe Rouga, 29, of Oak Lawn, Ill., Mary Bacco, 53, of Bridgeview, Ill., Steve Montega, also known as “Fonzie Cerano,” 44, of Orland Park, Ill., Niko Ristick, 23, of Orland Park, Ill., Tony Ristick, also known as “Anthony Walker,” 52, of Orlando, Fla., Rachel Montega, also known as “Samantha Walker,” 48, of Orlando, Fla., Robert Craig, also known as “Jake,” 37, of Lakeland, Fla., Steve Vega, also known as “Cabby,” 45, of Fort Lauderdale, Fla., Sophie Becho, 46, of Fort Lauderdale, Fla., Mark Blanca, 30, of Burbank Ill., Diana Lumas, 30, of Burbank, Ill., Ricky Blanca, also known as “Fonz Ristick,” 48, of Orland Park, Ill., David Jensen, also known as “Tony,” 52, of Lakeland, Fla., and Joe John, 66, of Arlington Heights, Ill.
The Department of Justice reiterated in a release that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count in the indictment is punishable by up to 20 years in federal prison. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.