Agents Behaving Badly, Part IV: Phony apps net real charges

In our latest roundup of agents caught on the wrong side of the law, we take a look at 3 recent cases involving insurance agents who submitted phony applications, thinking they could profit from commissions and – in one of the cases – their friends or relatives could collect death benefits as beneficiaries.

Surprise, surprise: It’s not working out quite as they had planned…

Georgia CPA arrested for insurance fraud

An accountant in the Atlanta area was arrested Nov. 15 by Special Fraud Investigators from the Georgia Department of Insurance and charged with 19 counts of insurance fraud, 11 counts of identity fraud and one count of theft by deception.

Georgia Insurance Commissioner Ralph Hudgens announced that Earle Turner, Sr., 67, a CPA from McDonough, Ga., is accused of falsifying multiple life insurance applications and collecting more than $11,000 in death benefits.

“Apprehending this suspect is a victory for all Georgia insurance consumers,” Hudgens said “Insurance fraud results in higher costs for us all.”

According to the investigation, in May 2017, the Georgia Department of Insurance was notified by Mutual of Omaha of suspected fraudulent activity by Turner. Mutual of Omaha indicated that they discovered three life insurance policies in their system with Turner named as the beneficiary. The insurer contacted the individuals listed as the policyholder, and each stated they had not applied for life insurance through the company and had not authorized Turner to do so on their behalf.

Following a six‐month investigation, GADOI Special Fraud Investigators found that Turner had taken out life insurance policies on 19 elderly adults without their knowledge or approval and received approximately $11,345.70 in death benefit payouts on five of the policies. Investigators also determined that Turner used the personal information he obtained from preparing his victim’s taxes to file the fraudulent policies. If convicted, Turner could face up to 10 years in state prison.

“We have found no evidence that this suspect has an insurable interest in any of these individuals,” said Deputy Insurance Commissioner Jay Florence. “Fortunately our investigators stopped this scheme before more policies were submitted without the consumer’s knowledge.”

The investigation was conducted with assistance from Mutual of Omaha’s Corporate Investigation Unit. The case will be prosecuted by the DeKalb County District Attorney’s Office.

Two agents, accomplices accused of life insurance scheme in Louisiana

Four women (including two insurance agents) in Louisiana were also arrested recently, also accused of obtaining life insurance policies on people without their approval or knowledge.

A Nov. 1 story posted on WAFB.com says court documents show Cleopatra Dunn, 43, of Gonzales; Derroclecia Dunn, 25, an insurance agent, of Clinton; Jyhmecia Dunn, 23, also of Clinton; and and Sheletha Henderson, 49, also an insurance agent, of Baton Rouge; are facing multiple felonies.

Per the story, Louisiana State Police reported that its insurance fraud unit was contacted in August by a detective with the Baton Rouge Police Department and a compliance investigator with the Louisiana Department of Insurance to look into a possible scheme in which insurance policies were being obtained on people without their approval or knowledge.

According to an arrest warrant, there was a case of a man who had discussed with Derroclecia Dunn about getting a life insurance policy but never completed the application process. The warrant stated the man later learned a policy was filed in his name and listed Cleopatra Dunn, Derroclecia Dunn’s mother, as the beneficiary.

Troopers stated there was a life insurance policy obtained on a man in which Henderson was the agent, while Cleopatra Dunn and Jyhmecia Dunn are listed as relatives and beneficiaries of the person named on the policy. They added the application stated the man had no medical issues. However, according to an arrest warrant, the man was not in good health at the time the policy would have been taken out and died after a lengthy illness.

The warrant stated Cleopatra Dunn and Jyhmecia Dunn made claims on the policy, but those were denied by the insurance company. The warrant added one of the man’s actual family members told investigators the job description and address were wrong on the policy. According to authorities, the family member also said Cleopatra Dunn and Jyhmecia Dunn are not related to the man.

According to jail records, Cleopatra Dunn and Jyhmecia Dunn were each booked into the East Baton Rouge Parish Prison on identity theft (3 counts), forgery (3 counts), and insurance fraud (3 counts). The jail reported they were released after posting the $18,000 bond each.

Jail records show Derroclecia Dunn is charged with identity theft (2 counts), forgery (2 counts), and insurance fraud (2 counts). According to the jail, she was released after posting a $12,000 bond.

Documents state Henderson is charged with one count each of identity theft, forgery, and insurance fraud. The records indicate she was released after posting a $10,000 bond.

All of the charges are felonies. The investigation is ongoing.

76 phony apps net fraud charges for agent

A 25-year-old insurance agent from Clarks Summit, Pa., submitted 76 phony applications for medical and life insurance policies, detectives from the Northeastern Pennsylvania Insurance Fraud Task Forge said.

According to an article on the Scranton, Pa., Times-Tribune, Chelsea Howe turned herself in for arraignment Oct. 24 on charges of insurance fraud, identity theft, forgery, criminal use of a communication facility and theft, according to the task force.

As an agent for Americo, Medico, Bankers Life and Casualty, Howe submitted dozens of policy applications without the knowledge or consent of the people named on the paperwork, police said. The crimes were committed between June of 2016 and January.

Detectives said Howe had access to victims’ bank information and used the information to pay $2,300 in her personal bills.

The various insurance companies noticed Howe submitted a higher number of applications and received commissions totaling more than $7,000. They became suspicious once they noticed that the premiums on the policies were not being paid and launched investigations.

How was released on $95,000 unsecured bail, with a preliminary hearing set for early November.

  • SEE ALSO:

Agents behaving badly: 4 cases of caught in the act

Agents Behaving Badly Part II

Agents Behaving Badly Part III

18 COMMENTS

  1. What always strikes me about cases like these is that these people apparently think they're the first one to ever do it. Like nobody will notice when the writing agent's name keeps coming up as bene, or an agent suddenly submits lots more apps than normal.

    When I was a young staff manager for a debit company, one of my agents was investigated by the company. The company auditor took me along to interview policyholders. As we traveled about, he shared some of the ways he can tell an agent is up to mischief, even from his office in another state. I was amazed how easy it is to spot it, and how really NOT clever these unscrupulous people can be.

  2. Back when I worked at a bank, I was taught about how to catch internal fraud on the branch level. This included cashier's checks and wire transfer fraud. I kept thinking that if I was going to do it, I would have to split it all 3 ways in order to get people to do it with me, and then flee the country within 24 hours.

    Just not worth it for less than $5 million per person payout, and that would've been hard to do with my transaction approval limits that I had at the time. (I was able to deposits up to $500k and $1 million for wire transfers back in the day.)

  3. DHK

    Back when I worked at a bank, I was taught about how to catch internal fraud on the branch level. This included cashier's checks and wire transfer fraud. I kept thinking that if I was going to do it, I would have to split it all 3 ways in order to get people to do it with me, and then flee the country within 24 hours.

    Just not worth it for less than $5 million per person payout, and that would've been hard to do with my transaction approval limits that I had at the time. (I was able to deposits up to $500k and $1 million for wire transfers back in the day.)

    So you actually considered this?:err:

  4. Sure I THOUGHT about it. That doesn't mean that I DID anything about it or even attempted anything. Nor did I ever talk to any of my employees about doing anything with me.

    But yeah, I thought about what it would take to pull something like that off and make it big enough to be worth it. It's just not worth it.

  5. shonceman

    So you actually considered this?:err:

    Who wouldn't in that situation. The fact he realized how difficult it would be and how small the reward would be meant that the bank had good safeguards in place. Not to mention DHK's own ethics and morals would stop him even if he was so inclined. Day after day with all that money around, it is just a natural thought.

    I always remember a story my cousin told me. His wife use to work at a bank in Las Vegas some years ago. One day one of her co-workers came to her and asked if she had ever seen a billion dollars before. Of course she said no, so they walked out to the loading dock and there it was, palletted and shrink wrapped to be send to the Fed. I'm sure there were plenty of armed guards as well.

    I'm sure it crossed many people's minds how to get that money, but that doesn't mean they were serious, just a thought they had.

  6. VolAgent

    Day after day with all that money around, it is just a natural thought.

    Strangely enough, the longer you work around paper money, the more it's just "inventory". It's stuff that needs to be managed. I had no temptations – particularly with internal dual controls for most tasks with cash. Handling cash in a bank was just a chore.

    It's when you're in bank management and you hear about all the local bank robberies, internal fraud, and other things… and it was OUR job to help detect these things and contact internal investigations as needed – which I've had to do multiple times.

    If you want to take the joy out of managing cash… work at a bank for an extended period of time.

  7. DHK

    Strangely enough, the longer you work around paper money, the more it's just "inventory". It's stuff that needs to be managed. I had no temptations – particularly with internal dual controls for most tasks with cash. Handling cash in a bank was just a chore.

    It's when you're in bank management and you hear about all the local bank robberies, internal fraud, and other things… and it was OUR job to help detect these things and contact internal investigations as needed – which I've had to do multiple times.

    If you want to take the joy out of managing cash… work at a bank for an extended period of time.

    I can see that. Once upon a time I worked in a restaurant and dealt with the cash at the end of the night. Wasn't terribly long, but quickly got tired of how dirty the money was and how dirty it made my hands. Never really thought about trying to steal it, but it really wasn't that much money, maybe a few thousand on a busy night.

  8. VolAgent

    Who wouldn't in that situation. The fact he realized how difficult it would be and how small the reward would be meant that the bank had good safeguards in place. Not to mention DHK's own ethics and morals would stop him even if he was so inclined. Day after day with all that money around, it is just a natural thought.

    I always remember a story my cousin told me. His wife use to work at a bank in Las Vegas some years ago. One day one of her co-workers came to her and asked if she had ever seen a billion dollars before. Of course she said no, so they walked out to the loading dock and there it was, palletted and shrink wrapped to be send to the Fed. I'm sure there were plenty of armed guards as well.

    I'm sure it crossed many people's minds how to get that money, but that doesn't mean they were serious, just a thought they had.

    So you have a criminal mind, too??!!!
    I’m just kidding anyway. (JK, DHK!)

  9. shonceman

    So you have a criminal mind, too??!!!
    I’m just kidding anyway. (JK, DHK!)

    I know, but think about it. You get bored, maybe you are pissed off at your boss or the company and thought of "Man, if I could just get a few million and then disappear…" crosses your mind.

  10. I worked in check processing at the Federal reserve Bank after college. We avoided having lunch with the folks from the cash department. The whole cash department had to leave and go to lunch at the same time and they had to lock up everything behind. And they had to report back from lunch at the same time too. We had lunch staggered so it was more enjoyable. And yes, when you work at the Federal reserve, you see lots and lots of cash.

  11. walthamny

    I agree. 11000 dollars. Don't these people learn from Madoff. If you are going to do this, do it big.

    The only thing I can think of here is that in keeping the amount small, they thought it would not be noticed.

  12. You mean the fact that the BANK has all these checks and balances within their internal security to PREVENT and CATCH internal fraud… and I just happen to THINK THROUGH all of this?

    And I was the branch OPERATIONS officer, so it was MY JOB to think this way to PREVENT internal fraud?

    And it was the BANK'S job to TRAIN me to think this way?

    EVERYTHING in banking is about PREVENTING fraud before it happens. Banks aren't about morality. They are about preventing losses. Minimize losses and maximize opportunities.

    You sure like to make morality judgments without a lot of facts.

LEAVE A REPLY

SHARE
Previous article2017 CSO kicks 3Q indexed life sales down a notch
Next articleACLI, IRI celebrate official 18-month delay of Fiduciary Rule