The former operator of a Georgia-based truck cargo insurance company has pleaded guilty to one felony count of insurance fraud.
John Paul Kill, 63, of Norcross, Ga., swindled more than $3.7 million from nearly 800 trucking companies nationwide for fraudulent cargo insurance policies, according to a release from the U.S. Department of Justice. He entered a guilty plea on Wednesday, May 6, before U.S. District Court Judge Eleanor L. Ross. A sentencing hearing is scheduled for July 10.
According to the Justice Department, Kill operated an insurance brokerage firm, Appeal Insurance Agency LLC and began offering cargo insurance policies to trucking companies in 2013. Kill falsely represented to clients that he would bind cargo insurance policies through Lloyd’s of London, the release stated. In the insurance industry, binding coverage serves as an agreement between the insurance provider and insured parties to provide insurance coverage. In reality, Kill did not bind any policies with Lloyd’s and instead pocketed the premium payments.
For a small portion of victims, Kill bound cargo insurance policies through a different company that offered less extensive coverage than the trucking companies thought they purchased through Kill. Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected for new policies, the release stated.
The Justice Department said nearly 800 trucking companies located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah and Virginia paid approximately $3.75 million in premiums for fraudulent insurance policies from 2013 through mid-2014.
Under the terms of the plea agreement, Kill faces a maximum term of imprisonment of 10 years and a maximum fine of $250,000. As part of the deal, prosecutors have agreed to recommend that Kill receive less than the maximum penalty due to his “expeditiously entered plea of guilty and the resulting conservation” of judicial resources, according to the plea agreement on file.
Kill also agreed to forfeit his financial assets, which he disclosed in court documents to be $725,841.61.
Copyright © OOIDA