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Former Insurance Company Chief Indicted
Thursday, July 3, 2014
Jeffrey Cohen, founder and former president of Indemnity Insurance Company RRG, is indicted in Maryland on five counts of making false statements to insurance regulators.
Jeffrey Cohen, 39, of Reistertown, Maryland, was indicted last week by a grand jury in Baltimore County, Maryland on five counts of making false statements during an investigation into his company, Indemnity Insurance Corporation RRG.
Cohen acted as the President and CEO of the Maryland-based risk and retention group until late last year. According to the indictment, as recently as 2012, IICRRG provided general liability, liquor liability and excess liability coverage to more than 3,000 nightclubs, restaurants and concert tours around the country.
He faces a maximum of 15 years in prison and a $250,000 fine.
Indemnity Insurance Corporation was forced into liquidation following an investigation by the Delaware Insurance Commission.
The indictment alleges that in June 2012, regulators from the Delaware Insurance Commissioner questioned the financial status of the company.
According to the U.S. Attorney’s Office in Maryland, Cohen allegedly caused IICRRG to file an unaudited financial statement in November 2012 and January 2013, and sent a letter to, the Commissioner, respectively, which falsely claimed that IICRRG had $5.1 million in cash on deposit, in order to influence the actions of the commissioner.
In April 2013, Cohen caused a fax to be submitted to the Commissioner that falsely claimed that a bank had verified that IICRRG had $5.1 million in cash on deposit at the bank.
The liquidation of the company is impacting hundreds of establishments in and around Connecticut.
As of April, at least 68 bars in Connecticut with pending liability cases against them, found out they no longer are insured. Meaning they are now forced to find representation and pay any losing claims out of their own pockets.
Records show more than 120 bars and restaurants with pending liability cases in New York are also left without insurance.
A NBC Connecticut Troubleshooters investigation in June found that bar owners are scrambling to find insurance in the aftermath. With many saying that if they do lose these pending cases, their only option would be to close down...
http://www.nbcconnecticut.com/troubleshooters/Former-Insurance-Company-Chief-Indicted-265778601.html
FBI Baltimore Division
Jeffrey Cohen Charged in Superseding Indictment with Wire Fraud, Money Laundering, and Making False Statements to Fraudulently Obtain More Than $100 Million in Insurance Premiums
Allegedly Created and Transmitted False Documents and Made False Statements
U.S. Attorney’s Office
September 17, 2014
District of Maryland
(410) 209-4800
BALTIMORE, MD—A federal grand jury has returned a superseding indictment charging Jeffrey Brian Cohen, age 39, of Reisterstown, Maryland, with wire fraud and money laundering in addition to the charges of making false statements to an insurance regulator that were included in the original indictment. The superseding indictment was returned on September 16, 2014.
The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service—Criminal Investigation, Washington, D.C. Field Office; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service—Washington Division.
According to the superseding indictment, Cohen acted as the president and chairman of the board of a Delaware corporation Indemnity Insurance Corporation RRG (Indemnity). Cohen previously controlled a District of Columbia corporation called Indemnity Insurance Corporation of DC, Risk Retention Group (Indemnity-DC), which was a predecessor entity to Indemnity. Both companies were located in Sparks, Maryland, and provided general liability insurance, liquor liability insurance, and excess liability insurance coverage to their customers, which were individuals and companies involved in the entertainment industry, such as nightclubs, concert tours, and special events. Both companies operated in several states, including Maryland. In 2012, Indemnity insured more than 3,000 policyholders, and collected over $25 million in premiums.
The Delaware Insurance Commissioner and the DC Insurance Commissioner were charged by law with the responsibility of protecting insurance policyholders and the general public by regulating insurance companies and risk retention groups and their products to ensure among other things, that insurance companies and risk retention groups have the ability to pay claims.
According to the 12-count superseding indictment, Cohen obtained and attempted to obtain money from insurance policyholders and potential insurance policyholders of Indemnity-DC and Indemnity based on financial ratings, financial audits, and insurance regulatory approvals that Cohen fraudulently obtained. The indictment alleges that beginning in January 2008, and continuing until the fall of 2013, Cohen defrauded insurance policyholders and prospective insurance policyholders in order to obtain more than $100 million in insurance premiums, by falsely representing the financial status of Indemnity-DC, Indemnity, and other Cohen controlled entities to insurance policyholders, prospective insurance policyholders, the rating agency A.M. Best, to independent auditors, the DC Insurance Commissioner, and the Delaware Insurance Commissioner.
Specifically, the superseding indictment alleges that Cohen created false financial documents, including bank statements, letters of credit, and confirmations of bank account balances. These documents allegedly included a bank confirmation from a fictitious entity called RBCI, purportedly showing that Indemnity-DC had a bank account with a balance of $10 million as of December 31, 2009, and a bank confirmation dated March 1, 2013, purportedly from RBC Government Demands, showing that Indemnity’s bank account ending in 6652 had a balance of $5,097,276. According to the indictment, Cohen transmitted these false documents to A.M. Best in order to obtain financial ratings for Indemnity-DC and Indemnity that were not based on the companies’ true financial condition. Cohen then allegedly touted the A.M. Best ratings to potential policyholders, policyholders, and regulatory agencies. Cohen also allegedly transmitted false and fraudulent e-mails, management representation letters, financial statements, and other documents to the auditing firms Marcum and BDO so the auditors would provide an unqualified audit opinion on Indemnity-DC and Indemnity financial statements that Cohen knew were false.
According to the superseding indictment, Cohen caused Indemnity-DC and Indemnity to issue insurance policies exceeding the coverage limits authorized by the DC Insurance Commissioner and the Delaware Insurance Commissioner. To conceal the true financial condition of the companies, Cohen allegedly transmitted fraudulent audited and unaudited financial statements for Indemnity-DC and Indemnity to the DC Insurance Commissioner and the Delaware Insurance Commissioner. Cohen also allegedly made false statements to representatives of the Delaware Insurance Commissioner in June 2012.
According to the indictment, Cohen also conducted financial transactions with the proceeds of the scheme. Specifically the indictment alleges that Cohen transferred $666,667.67 from a corporate account he controlled to an account in the name of a law firm, and Cohen transferred $200,000 from a corporate account he controlled to one of his personal accounts.
The indictment seeks forfeiture of $100,866,667.67, believed to be the proceeds of the scheme.
Cohen faces a maximum sentence of 20 years in prison for each of five counts of wire fraud, 10 years in prison for each of two counts of money laundering, and 15 years in prison for each of five counts of making false statements to an insurance regulator. No court appearance has been scheduled and Cohen remains detained.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the FBI, HSI Baltimore, IRS—Criminal Investigation and U.S. Postal Inspection Service—Washington Division for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Harry M. Gruber and Joyce K. McDonald, who are prosecuting the case.
This content has been reproduced from its original source.
https://www.fbi.gov/baltimore/press-releases/2014/jeffrey-cohen-charged-in-superseding-indictment-with-wire-fraud-money-laundering-and-making-false-statements-to-fraudulently-obtain-more-than-100-million-in-insurance-premiums
Maryland insurance executive pleads guilty in insurance fraud scheme
June 16, 2015
After four days of trial, Jeffrey Brian Cohen, 39, of Reisterstown, Md., pled guilty on June 5 to wire fraud, aggravated identity theft, making false statements to an insurance regulator, and obstruction of justice.
Rod J. Rosenstein, the U.S. Attorney for the District of Maryland, announced the guilty plea, stating, “Jeffrey Cohen carried out a massive fraud scheme for which he finally will be held accountable.”
...Cohen admitted that he obtained and attempted to obtain money from insurance policyholders and potential insurance policyholders of Indemnity-DC and Indemnity based on financial ratings, financial audits and insurance regulatory approvals that he fraudulently obtained.
Beginning in January 2008, and continuing until the fall of 2013, Cohen defrauded insurance policyholders and prospective insurance policyholders in order to obtain more than $100 million in insurance premiums, by falsely representing the financial status of Indemnity-DC, Indemnity and other Cohen controlled entities to insurance policyholders, prospective insurance policyholders, the rating agency A.M. Best, to independent auditors, the D.C. Insurance Commissioner and the Delaware Insurance Commissioner.
False information for ratings
According to Rosenstein’s statement, Cohen created false financial documents, including bank statements, letters of credit, and confirmations of bank account balances. Cohen transmitted some of these false documents to A.M. Best in order to obtain financial ratings for Indemnity-DC and Indemnity that were not based on the companies’ true financial condition. Cohen then touted the A.M. Best ratings to current and potential policyholders and regulatory agencies. Cohen also transmitted false and fraudulent emails, management representation letters, financial statements, and other documents to the auditing firms Marcum and BDO so the auditors would provide an unqualified audit opinion on Indemnity-DC and Indemnity financial statements that Cohen knew were false. Cohen used the name and identity of a bank official to create a false bank confirmation.
To conceal the true financial condition of the companies, according to the plea agreement, Cohen transmitted fraudulent audited and unaudited financial statements for Indemnity-DC and Indemnity to the D.C. Insurance Commissioner and the Delaware Insurance Commissioner. Cohen also made false statements to representatives of the Delaware Insurance Commissioner in June 2012.
The Delaware Insurance Commissioner began civil proceedings against the Cohen companies in June 2013. In October 2013, two attorneys referred Cohen’s criminal offenses, including the false statements to an insurance regulator offense to which he pled guilty, to federal authorities. On February 20, 2014, Rosenstein said in a statement, Cohen threated one of the attorneys who had referred his case in an effort to prevent the attorney from communicating with federal law enforcement concerning the crimes Cohen committed in the operation of his insurance companies.
Cohen faces a maximum sentence of 20 years in prison for each of the wire fraud and obstruction of justice counts, 15 years in prison for making false statements to an insurance regulator, and a mandatory two years, consecutive to any other sentence, for aggravated identity theft. Cohen remains detained until his sentencing on Aug. 6, 2015.
http://www.propertycasualty360.com/2015/06/16/maryland-insurance-executive-pleads-guilty-in-insu?page_all=1
