Scammer and his yacht get sinking feeling

By James Quiggle
March 1, 2002
Like his luxury yacht, Rex DeGeorge has a sinking feeling.

It's not just that a shadowy former Russian submariner pirated his 76-foot luxury motor yacht on the high seas. It's not just that the Russian locked him below deck and tried to scuttle the boat off the coast of Naples, Italy.

What really riles the Beverly Hills lawyer is the feds don't believe a word of it. In fact, DeGeorge tried to sink the vessel himself, screwed that up, then invented a leaky story when the Italian coast guard caught him in the act.

All this so he could bilk his insurance companies out of $3.5 million. DeGeorge could have years to figure out how to drill better holes in a hull because a federal court just convicted him of insurance fraud.

Here's the scoop: DeGeorge bought the Principe di Pictor for $1.9 million, inflated its value to $3.5 million through sham transactions, then took out a fat insurance policy for the bogus value.

Soon afterward, DeGeorge and two cronies took the boat to Italy, where they tried to cut through the hull with saws and electric drills about 50 miles off the coast. His aim was to sink the boat and claim the $3.5 million.

The trio cut and drilled hard through the night, but the boat was still afloat the next morning. An Italian coast guard cutter happened on the scene and wondered what was going on.

So the panicky crew tossed the cutting tools overboard and climbed into two dinghies as the cutter approached. Thinking fast, DeGeorge quickly invented a salty tale when the Italians caught up. his hired captain had quit on them, but in Naples they befriended one Capt. Andrea Libovich, who agreed to motor them to Greece with two crewmates.

But once on the high seas, DeGeorge told the incredulous Italians, Libovich and his gang pulled guns on the Americans, locked them in a compartment and then tried to sink the ship. Libovich maybe belonged to a smuggling ring that wanted the yacht for drug running, but tried to sink the Principe when he realized it couldn’t outrun the coast guard, DeGeorge claimed. Libovich then escaped in a black speedboat that sped off toward Libya.

None of it added up.

Italian officials tried to find Libovich but no one found a shard of proof he ever existed. And why didn't DeGeorge radio for help after Libovich sped off? And why was DeGeorge so glum-looking when the coast guard showed up to save their lives? Why didn't he look very disheveled after such an arduous ordeal?

Cigna Property and Casualty was on the ropes for the $3.5 million claim, and hired a brash young lawyer named Neil Lerner to sue DeGeorge to void the boat policy. Lerner found DeGeorge had collected more than $2 million from dozens of suspicious claims over the years – making him one of the biggest insurance cheaters in America.

Like the 43-foot yacht he said Peruvian coffee dealers stole off the coast of Los Angeles after drugging him and dumping him into a dinghy. Or the 57-foot racing yacht he claimed sank after hitting a dark object off the coast of Italy one night.

Or the 47-footer he said assassins blew up off the coast of Southern California during a nasty business lawsuit. For some reason DeGeorge never told police he was nearly murdered, but still filed a $245,000 insurance claim four days later. He collected it all.

Lost art, stolen suitcases, medical claims for bipolar personality disorder – you name it – his parade of suspicious claims seemed endless. DeGeorge usually got his money through sheer bluster: He sued or threatened to sue whenever insurers refused to pony up. Many settled to avoid possibly huge jury awards or just to get him out of their hair.

Cigna and Lerner, however, took DeGeorge to the mats. They finally nailed him in civil court and voided the policy. Then the feds zapped him on criminal charges this month.

DeGeorge could land 80-years in the slammer when he's sentenced this May – a virtual life term.

This yachter, it seems, has finished making waves.

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