Employees at work inside the office of Oscar, a startup health insurance company, at the Puck Building in New York, March 28, 2014. Oscar is only one of two for-profit companies that were not already health insurers to enter the state markets since the passing of the Affordable Care Act. (Joshua Bright/The New York Times)

SAN DIEGO - A San Diego driver believes an insurance scammer may be driving the roadways.

Tom, who asked us not to use his name, says the dashcam on his wifes SUV captured the incident between the SUV and a sedan on Sunday afternoon in North Park.

He was coming up to the stop sign and she was behind him, said Tom.

Tom says his wife -- as the dashcam on her SUV was rolling -- watched the car in front of her do something strange.

Insurance Broker Sentenced for Fraud
Hundreds of Companies Victimized in Multi-State Scheme


More than 800 commercial trucking companies in nearly a dozen states paid Atlanta-area insurance broker John Paul Kill approximately $3.7 million in premiums from 2013 to mid-2014 to purchase insurance that protected their livelihoods: their cargo and the trailers that carried it.

There was only one problemfor the most part, Kill didnt purchase the insurance requested by his customers. Investigators with Georgias Insurance Commissioners Office discovered that Kill pocketed the premiums for his personal use.

Once Georgia officials realized the extent of Kills activitiesmillions of dollars in stolen premiums from customers in multiple jurisdictionsthe office requested the assistance of the FBI. And as a result of the ensuing joint investigation, Kill pled guilty in federal court earlier this year to the nationwide cargo insurance scam. This past August, he was sentenced to four years in a federal prison and was also ordered to pay $1.23 million in restitution to his victims.

Protect Yourself from Insurance Fraud

The victims of John Paul Kills insurance fraud scheme were commercial trucking companies, but anyonepublic, private, and/or commercial enterprises, as well as regular citizenscan be victimized by insurance fraudsters. Here are a few general tips to help ensure that doesnt happen:

- Know your agent or broker. Make sure they are licensed professionals and ask for references.

- Dont allow high-pressure salesmanship to persuade you to sign up for certain coverage. Take your time and do your research.

- Dont give an insurance agent or broker money without getting a receipt.

- Get a copy of your policy, and make sure you read it to ensure youre getting everything youre paying for.

- Confirm with the actual insurance company that you have coverage with them.

- Never buy insurance from unlicensed agents or companies, and if you have any doubts about them, check their status by contacting your states insurance office.

And if you think youve been scammed, contact your states insurance office immediately.

How did the scheme work?

In 2013, Kill, through his company, Appeals Insurance Agency (AIA)which was actually housed in the basement of his homebegan offering cargo insurance. He advertised his services mostly through word of mouth and by making cold calls to commercial trucking companies. Kill would solicit insurance agents to write policies for trucking companies and then, in his capacity as a broker, would claim to bind the policies written for those companies to recognized insurance companies, including Lloyds of London. In the insurance industry, binding coverage serves as an official agreement between the insurance provider and the insured party to provide insurance coverage.

For a small percentage of his clients, Kill bound cargo insurance policies through insurance companies that actually offered less extensive coverage than what the trucking companies thought they had purchased. But most of his clients received no policies at alldespite the premium payments they paid to Kill.

In addition to using the premiums sent to him by the trucking companies for his own benefit, Kill used a portion of the funds to pay off insurance claims that were filed with his office. Since most of his customers had no actual insurance coverage, he paid their claims so he wouldnt raise their suspicionshe wanted to prolong the life of his illegal scheme for as long as possible.

At one point, though, a concerned insurance agent sent Lloyds of London a copy of a contract supposedly bound by John Paul Kill but which was actually fraudulent. Lloyds then contacted Georgias Insurance Commissioners Office to file a complaint. That office investigated, and subsequent search warrants uncovered bank ledgers showing that Kill, through AIA, deposited the illegal proceeds of his fraud into his own personal bank accounts. Kill later admitted to putting insurance premium checks into his accounts and also to creating insurance policy cover sheets for insurance agents and customers to make them believe they had purchased cargo theft insurance.

In addition to the actual trucking companies, Kills victims included the insurance agents and insurance agencies who wrote the policiesmany were significantly affected by Kills actions in terms of monetary losses, harm to their reputations, and civil lawsuits filed by the trucking companies.

At the time of Kills guilty plea, FBI Atlanta Special Agent in Charge J. Britt Johnson said, This case was about theft and greed. Mr. Kill displayed a complete disregard for his client companies, leaving them legally and fiscally vulnerable while allowing them to believe that they had appropriate insurance coverage. The FBI is pleased with the role it played in bringing this case forward for prosecution and holding Mr. Kill accountable for his actions.

And if a prison term and an order to pay more than a million dollars in restitution werent bad enough for John Paul Kill, the state of Georgia also revoked his license to sell insurance.

Special thanks to our colleagues in Georgias Insurance Commissioners Office, whose expert investigative work laid the foundation for this successful federal prosecution.

- Press release

Instead, GE is giving each retiree $1,000 to be used toward the cost of supplemental insurance through Towers Watsons OneExchange, a private health insurance exchange.

Bargaining-unit retirees, including more than 4,000 in the Erie area, were notified in August about the switch, which did not have to be negotiated.

Applications for the insurance are currently taking place.

Its a huge change for our retirees, said Ron Flowers, 74, a GE Transportation retiree and president of RAGE The majority of our retirees are well over 65, and they might not be up on all the new insurance changes. Until now, they only had to choose between a Medigap policy offered by GE and a Medicare Advantage plan. Now they have all these options with different co-payments, deductibles and premiums.

GE executives have said other large companies have taken similar steps and that retirees still will receive quality coverage under the new system.

Company filings have shown that switching supplemental insurance plans for salaried retirees has saved GE more than $1.4 billion.

The company during the last round of negotiations said the average retiree receives a pension of $300 a month, Flowers said. So any increase in their insurance costs will be a major deal.

Retirees costs could increase significantly in 2017 if GE eliminates the $1,000 subsidy. The company is not required to provide it, said Scott Slawson, president of Local 506 of the United Electrical, Radio and Machine Workers of America.

I believe its something GEs board of directors has to approve each year, Slawson said.

Some local GE retirees have already used the OneExchange program and said the exchange has worked for them.

Charles McCracken retired as a salaried GE Transportation employee in 2010 and applied for supplemental health insurance in October 2014 just before he turned 65.

My costs have been about the same, if not lower, with $1,000, McCracken said. The folks with OneExchange couldnt have been nicer and more patient. They explain the options and run all the numbers for you.

Two retirees have sued GE in federal court, claiming the company has violated federal law by switching the plans.

Flowers said a council representing GE retirees across the nation will meet with company officials in November.

You can bet health insurance will be discussed, Flowers said.

DAVID BRUCE can be reached at 870-1736 or by e-mail. Follow him on Twitter at twitter.com/ETNbruce.

After being hit with historic levels of flooding, South Carolina residents are undoubtedly scrambling for their insurance policies this week. Especially if you live in an area where flooding is common, this serves as a solid reminder to make sure youre properly covered. But if you dont already have a policy, it may be too late.