A Peekskill man, the head of a Scarsdale insurance agency and a Florida man have been accused in a $100 million insurance scam.
James Kevin Kergil of Peekskill, Michael Binday of New York City and Mark Resnick of Orlando, Fla., were indicted on federal charges of conspiracy to commit mail fraud and wire fraud charges, the U.S. Attorney’s Office announced today. Officials said that Binday is the owner and president of a Scarsdale insurance company but would not name the business.
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The three were accused of conspiring to defraud major insurance companies into issuing life insurance policies valued at more than $100 million to straw buyers that actually were paid for and benefited investors.
Binday, Kergil and Resnick earned millions of dollars in commissions from their scheme and even arranged to purchase policies from straw buyers for themselves to gain the benefits when the buyers passed away, the U.S. Attorney’s Office said in a news release. The total amount they reaped was not disclosed.
According to the release, the scam spanned the past five years as they recruited older clients of modest means as “straw buyers” to apply for policies, promising them payments that would come from reselling the policies. Binday submitted applications with incorrect information including inflated assets and net worths so the insurance companies would issue policies for larger amounts, the U.S. Attorney’s Office said.
Binday, the president and owner of the Scarsdale agency, surrendered to authorities today, while Kergil, an independent insurance agent, and Resnick were arrested.
They were also accused of obstructing justice during the investigation of the case.
“When their scheme was unraveling, they allegedly sought to throw investigators off the trail by destroying documents and telling other individuals to lie,” U.S. Attorney Preet Bharara said. “Their alleged actions victimized the companies that issued these policies, and hurt the grand jury process, and now they will be held accountable for their crimes.”
The companies deceived in the scheme include American General Life Companies, Lincoln Financial Group, Security Mutual Insurance Company and Union Central Life Insurance.
FBI Assistant Director-in-Charge Janice K. Fedarcyk noted that the companies weren’t the true victims because extra costs typically get transferred onto all the other policy holders.
