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Life insurance agent, clients accused of criminal frau

An investigation conducted by the Louisiana Office of Inspector General, Internal Revenue Service and Federal Bureau of Investigation has led to charges against seven individuals from Louisiana. Allegedly, the suspects are part of a $100 million life insurance fraud scheme that allowed them to gain money in an illegal manner.

All seven individuals have been hit with mail fraud charges, but one of them has been accused of more than just that. Records indicate that this individual, a 34-year-old male from Denham Springs, Louisiana, was an insurance agent for New York Life and Lincoln Financial. Allegations against him suggest that he used his position to receive commissions by selling life insurance based on false information. This false information was usually the applicants' annual income and net worth.

Prosecutors believe that the 34-year-old tricked companies into approving the policies and received commission payments that were in the hundreds of thousands of dollars. Reportedly, these commission payments were unwarranted because the agent was defrauding the companies that employed him.

Due to the size of the policies, applicants could not afford to make payments so the agent supposedly implemented a process called "rebating." Rebating involves the agent making payments on the policy premium for the applicants, a process that is illegal in Louisiana. According to investigators, the agent placed money directly into the bank accounts of applicants so they could make payments without his involvement being registered.

The 34-year-old has been charged with money laundering, asset forfeiture and mail fraud. He may be required to pay up to $500,000 in fines or twice the gross gain or loss from criminal activity. In addition, he faces up to 30 years in prison. The remaining six individuals each face fines up to $250,000 and a maximum of five years in prison for the conspiracy to commit fraud. These individuals were all applicants that allegedly lied about their annual income and net worth.

There was no report on whether any of the accused has sought the services of a criminal defense attorney in this case. A criminal defense attorney will examine all the evidence to ensure each of the charges leveled are appropriate. An attorney will also ensure each defendant receives due process under the law and his or her rights are protected at every step.

Source: WAFB, "7 face charges in life insurance fraud scheme," July 25, 2012

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