Former U.S. broker sentenced to four years in prison for US$3.75 million in insurance fraud

A former insurance broker in the United States has been sentenced to four years in federal prison for illegally collecting over US$3.75 million from nearly 800 trucking companies nationwide by selling or brokering fictitious cargo insurance policies.

John Kill, the former operator of Appeal Insurance Agency, LLC, “held himself out as an honest broker to hundreds of trucking companies, but he simply pocketed their premium payments instead of securing legitimate insurance coverage,” said U.S. Attorney John Horn in a statement from the Federal Bureau of Investigation (FBI) on Tuesday. “His scam tricked clients into believing they had proper insurance coverage and endangered small businesses operating in more than 20 states.”

According to Horn, the charges, and other information presented in court Kill operated the insurance brokerage firm, Appeal Insurance Agency, LLC, in Norcross, Georgia. He began offering cargo insurance policies to trucking companies in 2013. Kill issued policy binders to clients falsely representing that Lloyd’s of London would provide insurance coverage.

In reality, Kill never brokered any agreement with Lloyd’s to provide coverage and instead pocketed the premium payments. Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected from new victims, the FBI said.

In total, nearly 800 trucking companies located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia paid approximately $3.75 million in premiums for these fraudulent insurance policies from 2013 through mid-2014.

Kill, 63, of Norcross, Georgia, was sentenced by U.S. District Court Judge Eleanor L. Ross to four years in federal prison to be followed by three years of supervised release, and was ordered to pay approximately US$1.23 million in restitution to victims. Kill was convicted on this charge on May 6, after he pleaded guilty.

This case was investigated by the FBI and the Georgia Office of Insurance and Safety Fire Commissioner. Assistant U.S. Attorney Nathan P. Kitchens prosecuted the case.