Insurance Fraud NEWS
New Yorker crashes, finds agent steals auto premiums
November 08, 2019, St. Joseph, NY
A former insurance agent admitted Thursday to defrauding several customers by pocketing money they gave him to pay insurance premiums.
Kevin Donnellan, 62, of Stevensville, pleaded guilty in Berrien County Trial Court to common law fraud, a 10-year felony; and two counts of insurance fraud, a 4-year felony. Judge Angela Pasula accepted his plea and set sentencing for 1:30 p.m. Dec. 16. Meanwhile, Donnellan is free on a $20,000 bond, is on GPS tether, and as a bond condition, has been ordered by the judge not to handle other people’s money.
Donnellan’s lawyer, Joseph Fletcher, asked for that condition to be removed, saying Donnellan has a job working at a local Holiday Inn and part of the job involves processing credit card payments. Pasula denied the request. Donnellan’s insurance business, which was Donnellan Insurance on Ship Street in St. Joseph, has closed.
Donnellan originally faced 12 counts of insurance fraud, in addition to the one count of common law fraud. As part of a plea deal with prosecutors, 10 counts of insurance fraud were dismissed. The plea deal calls for Donnellan to pay restitution to all the customers he defrauded, not just the two for which he pleaded guilty.
Donnellan admitted to defrauding two customers between January and July and several others in previous years. He was in business for more than 30 years.
Detective Adam Herbert with the St. Joseph Department of Public Safety and Berrien County Prosecutor Michael Sepic have said there may be more victims who have not come forward.
Herbert said the case came to light in July after a woman who had been involved in a car accident was notified that she was being sued for damages by Progressive Insurance, the other driver’s insurance company, but also by her own company. When she looked into the allegations in the lawsuit, she found that her own car insurance policy had been canceled earlier for lack of payment. The woman called police, who began an investigation.
Herbert said Donnellan was found to have taken money from customers to set up insurance policies, then failed to turn payments over to the insurance companies. The policies would eventually be canceled due to lack of payment. Herbert said police believe Donnellan gave false addresses and phone numbers for clients when setting up insurance policies, so they did not receive notifications that payments had not been received and their policies were canceled.
It was only after being in need of the insurance that the customers would discover they were not insured.
A complete list of known victims and amounts of restitution is to be submitted to the court prior to sentencing.
Source: The Herald-Pallaadium