Share This Article:
Louisville Woman Sentenced To 3 Years And 5 Months For $1.1 Million Insurance Fraud Scheme
26 Mar, 2008 WorkersCompensation.com
Insurance agent created multiple fake companies to defraud insurance premium lenders
Louisville, KY (CompNewsNetwork) - U.S. Attorney David L. Huber of the Western
District of Kentucky announced that Gail Kubovchik, age 57, of 6813 Carslaw Court,
Prospect, Kentucky, was sentenced to 3 years and 5 months imprisonment in United States
District Court, Louisville, Kentucky, for one count of mail fraud. Chief Judge
John G. Heyburn II, also sentenced Kubovchik to 3 years supervised release following
incarceration. There is no parole in the federal judicial system. In addition,
restitution in the amount of $1,075,504.66 was imposed.
U.S. Attorney Huber praised the work of the Kentucky Office of Insurance and cited this
as another example of diligent state and local police work. Approximately one-third
of our cases are due to local and state law enforcement
agencies.
John Burkholder, Acting Executive Director of the
Kentucky Office of Insurance, said, “I commend our fraud investigators for taking the
initial action against this unlicensed activity and the other law enforcement agencies for
the outstanding collaborative effort. We all pay when this type of activity goes
unpunished. It is important for consumers to verify that they are dealing with a licensed
agent.”
Kubovchik plead guilty in October 2007 and admitted
that, from on or about December 2005 until February 2007, she owned and operated The
Service Agency, a commercial insurance agency located in Louisville, Kentucky. During
this period, Kubovchik knowingly executed a scheme to defraud multiple insurance companies
and insurance premium finance companies by means of false and fraudulent pretenses in the
total amount of $1,104.066.
The scheme to which she pleaded
guilty involved Kubovchik fraudulently applying for and receiving dozens of bogus insurance
policies on railroad cars that did not exist. She applied for and received insurance
policies for railroad cars from multiple insurance companies, including the Fireman’s Fund,
Zurich Insurance, and United Shortline. She was able to obtain the bogus insurance
policies by creating fictitious companies that allegedly owned the railroad cars. To
accomplish this, she would create the fictitious businesses using various internet Web
sites and then obtain actual insurance policies on the railroad cars allegedly owned by the
bogus companies. She would then obtain financing for the bogus insurance policies
from insurance premium finance companies, including Baytree Finance Company, Arizona
Premium Finance Company, and Premium Payment Plan. It is a common practice in the
insurance industry to obtain loans to finance large insurance policy premiums.
Kubovchik caused the three finance companies to finance dozens of bogus insurance
policies.
In addition, Kubovchik’s scheme to defraud
involved her obtaining multiple premium finance loans, each from different finance
companies, on the same bogus insurance policy. She would then use the proceeds
from the first loans to pay the monthly premiums on the bogus insurance policy and then
would keep the second loan’s proceeds for herself.
For
each of the fraudulent loans obtained on the bogus insurance policies, Kubovchik caused
documents to be mailed in the United States Mail by the premium finance companies,
including Baytree Finance Company, Arizona Premium Finance Company, and Premium Payment
Plan.
Ultimately, Kubovchik caused 45 fraudulent loans to
be funded by Baytree Finance Company, 3 by Arizona Premium Finance Company, and 31 by
Premium Payment Plan. The total loss was approximately $1,104,066.
The case was prosecuted by Assistant United States
Attorney Bryan Calhoun, and it was investigated by the Federal Bureau of Investigation,
U.S. Postal Inspection Service, and the Kentucky Office of Insurance.
Read Also
- Jul 03, 2024
- WorkersCompensation.com
- Jul 02, 2024
- WorkCompCollege
- Jul 02, 2024
- Horizon Casualty Services
About The Author
About The Author
- WorkersCompensation.com
More by This Author
- Jul 13, 2024
- WorkersCompensation.com
- Jul 03, 2024
- WorkersCompensation.com
- Jun 23, 2024
- WorkersCompensation.com
Read More
- Jul 03, 2024
- WorkersCompensation.com
- Jul 02, 2024
- WorkCompCollege
- Jul 02, 2024
- Horizon Casualty Services
- Jun 24, 2024
- WorkersCompensation.com
- Jun 23, 2024
- WorkersCompensation.com
- Jun 21, 2024
- WorkCompCollege