A former Bismarck-area insurance agent faces 27 felony charges related to accusations he pocketed more than $1.4 million from clients that was meant to go toward insurance premiums and investments.
Brent L. Kitzan was charged Friday with 14 counts of Class B felony theft of property, eight counts of Class C felony insurance fraud and five counts of Class B felony registration of securities.
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A warrant has been issued for Kitzan’s arrest. The Class B felonies carry maximum sentences of 10 years in prison, while the Class C felonies carry maximum five-year prison sentences.
Kitzan does not have a listed home phone number, and a number for his company, Kitzan and Associates, has been disconnected.
Kitzan was an insurance agent in Bismarck. In December, both the North Dakota Insurance Department and the North Dakota Securities Department issued cease and desist orders against Kitzan and his company, Kitzan and Associates, for alleged misappropriation of client funds.
According to affidavits from Kelly Wayne Mathias, supervisor of investigations and examinations with the securities department, and Joe Dale Pittman, a special investigator with the insurance department’s fraud unit, Kitzan is accused of defrauding clients, many of them elderly. The court documents say Kitzan was collecting insurance premiums from clients but never remitting the payments to insurance companies, taking out personal loans from clients and collecting money for investments from clients but never investing the money.
The two state agencies conducted a joint investigation of Kitzan following complaints about him.
“That investigation revealed and alleges that Brent L. Kitzan perpetrated multiple schemes against several clients, including elderly clients of his insurance book of business, and stole in excess of one million dollars,” Mathias’ affidavit said.
The charges filed Friday relate to 21 alleged victims for conduct dating back to 2003. In all, Kitzan is accused of taking $1,455,129.20 from the 21 clients. A married couple, identified as victims 12 and 13, took the biggest hit, with investment losses of $100,650 and fraudulent insurance payments of $257,264.04.
Mathias’ wrote in his affidavit that the securities department was contacted by Marian Manor Healthcare in Glen Ullin in October 2011 over concerns about a patient’s funds that were being managed by Kitzan. The investigation showed that Kitzan managed the money of the patient, identified as “victim one” in court documents, as well as that of the patient’s daughter, identified as “victim two.” Victim two’s grandson told investigators Kitzan “controlled everything” for the two women.
Victim two also reported Kitzan showed up at victim one’s home after she died and destroyed documents he said they didn’t need anymore. Victim two kept copies of some of the destroyed documents.
Other clients began questioning Kitzan when insurance companies sent them notices that there coverage had lapsed. Kitzan told them the notices were mistakes and he would take care of it. A financial planner helping an elderly couple, victims three and four, became suspicious that Kitzan was stealing from the couple when he was helping them with their finances. Other families discovered irregularities in the finances of Kitzan’s clients after their deaths.
Mathias’ affidavit said Kitzan was never registered as a securities agent or as a broker/dealer in North Dakota or elsewhere, and there was no record of him registering for the sale of securities in the companies in which he purportedly invested clients’ money.
