Saturday, February 26, 2011
Feds charge 8 at Monsey insurance company with fraud
Feb. 26, 2011
A Monsey insurance company and several of its associates have been charged by the U.S. Attorney's Office in Brooklyn with bilking $550 million from insurance companies through fraud.
Eight people affiliated with Liberty Planning Inc. on Monsey Boulevard issued phony statements to persuade insurance companies to issue policies with high death benefits at lower premiums for older, sickly clients.
The statements falsely told the insurance companies that their straw clients were wealthy.
The eight people charged in the case received large commissions on the policies and defrauded investors looking to buy the policies on the secondary market, according to the indictment.
The indictment charges that Chaim Mayer Lebovits, the vice president and managing general agent for Liberty Planning, supervised the insurance agents and dispersed money from Liberty's bank accounts.
He is accused of facilitating the purchase of policies on behalf of elderly straw clients.
While Lebovits is not associated with the Patrick Farm project, members of the Lebovits family are seeking to develop a 208-acre parcel off Routes 202 and 306 in Ramapo.
Also charged in the insurance case were agents Avigdor Gutwin, Leo Fekete, Moses Neuman, Yudah Neuman, Edward Grodsy, Sophia Brodsky and Arnold Cohen. No addresses were released by the U.S. Attorney's Office.
Those charged could not be reached for comment.
All eight were released on bail after being arraigned Thursday in U.S. District Court in Brooklyn. The U.S. Attorney's Office for the Eastern District's jurisdiction covers Brooklyn, Staten Island, Queens, Nassau County and Suffolk County.
The indictment charges Lebovits and the others with conspiracy to commit mail and wire fraud schemes, conspiracy to commit money laundering, three counts each of mail and wire fraud, and three counts of money laundering.
"It was a part of the scheme that the organizers engaged in financial transactions designed to falsely convince the insurance companies that the straw buyers were paying the premiums on the policies," the indictment states.
The indictment states that the organizers paid the premiums from the bank accounts of companies that they controlled.
Their goal was to profit from death benefits they would collect if their phony buyers died before the periods of contestability expired, through commissions that Liberty Planning, other agencies and agents would receive from the premiums and the profits from reselling the policies on the secondary market.
The U.S. Attorney's Office is seeking at least $550 million from those charged, arguing they are jointly and separately liable.