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  • Delawareans indicted for insurance fraud

    Delawareans indicted for insurance fraud

    Several residents have been indicted on insurance fraud, the Delaware Insurance Commissioner’s Office announced Monday.

    Late last month in New Castle County, a Grand Jury indicted multiple residents for insurance fraud. The indictments stem from Department of Insurance Fraud Prevention Bureau investigations, in partnership with the Delaware Department of Justice. They allege that following vehicle accidents, each indicted resident did knowingly present false information to auto insurers or otherwise caused false information to be presented.

    “I want to commend our Fraud Prevention Bureau for their work identifying deceitful activity and helping to bring those who would defraud Delaware residents and companies to justice. Their efforts continue to send a strong message that fraud will not go unnoticed here, which can prevent future crimes,” said Insurance Commissioner Trinidad Navarro. “Through this work, we can help keep insurance premiums from rising by helping to make sure companies do not have to pay out fraudulent claims, and we can educate residents that engaging in fraud is very costly.”

    A resident of Wilmington was indicted on September 27 following a two-vehicle auto accident and a fraudulent claim filed with Permanent General Insurance. The resident had no insurance at the time of the accident but obtained it afterward, and intentionally misrepresented the date of the accident to obtain a benefit that they were not entitled to. Video evidence was uncovered that confirmed the accurate date of the accident.

    A resident of Newark was indicted on September 27 for knowingly misrepresenting the time of an auto accident. During the investigation, evidence was obtained that confirmed that the resident had no auto insurance coverage at the time of their accident and that their auto insurance policy was obtained after the accident had occurred. They engaged in insurance fraud through intentionally providing false information in order to obtain a benefit that they were not entitled to from Good to Go Insurance.

    An additional resident was indicted for similar activity in an attempt to defraud Progressive Insurance. The resident obtained an auto insurance policy and filed a claim two days later, stating that their vehicle was struck by an unknown vehicle while parked at their residence. An examination of vehicle damage was inconsistent with this depiction, and the investigation further identified that the vehicle was involved in an accident three days prior to obtaining insurance coverage.

    An indictment is merely an allegation and is not evidence of guilt. In all cases, defendants are presumed innocent until and unless proven guilty. Insurance Fraud is a felony.

  • State Auditor Kathy McGuiness pleads not guilty to misconduct charges

    State Auditor Kathy McGuiness pleads not guilty to misconduct charges

    Delaware State Auditor Kathy McGuiness has pleaded not guilty to charges of fraud, nepotism, and official misconduct after she was indicted Monday by a grand jury.

    McGuiness turned herself into authorities Tuesday morning and attended a bail hearing at the Leonard L. Williams Justice Center in Wilmington where she pleaded not guilty to numerous charges of misconduct while in office.

    Kathy McGuiness
    Kathy McGuiness

    McGuiness waived her right to hear the charges and bail was set at $50,000 unsecured, according to the Delaware Department of Justice (DOJ). She was also ordered to refrain from contacting any former employees of the office along with discussing the nature of the investigation with anyone currently employed at the Auditors Office.

    A press conference was held outside the New Castle County Courthouse Monday where Attorney General Kathy Jennings said their investigation confirmed a “clear and disturbing pattern.”

    “The investigation has confirmed a clear and disturbing pattern of behavior that was not only unethical, but it was against the law,” Jennings said. “We uncovered corruption, nepotism, fraud, and misconduct that implicated thousands of taxpayer dollars.”

    The investigation, which Attorney General Jennings stressed remains ongoing, comes after several whistleblowers came forward to inform the DOJ of the alleged misconduct.

    The Division of Civil Rights and Public Trust was able to obtain an indictment following a full-scale investigation involving witness interviews and document reviews that officials say prove the allegations.

    McGuiness was indicted on charges of conflict of interest in violation of the state’s code of conduct, felony theft, non-compliance with procurement law by structuring state payments, official misconduct, and felony witness intimidation.

    Attorney General Jennings said the investigation uncovered a “sweetheart deal” to avoid oversight of State Auditor McGuiness’ state contract with campaign vendor ‘MyCampaignGroup.’

    “She informed them of a loophole that would allow them to avoid a competitive bidding process by keeping the initial contract amount below $50,000,” Jennings stressed. “The bidding process exists to protect taxpayers. It’s there to prevent this exact behavior. A month later, the defendant entered into a contract with MyCampaignGroup, which was never submitted for public bidding whatsoever. In total, the State Auditor’s Office paid MyCampaignGroup $49,900, just $100 shy of the public bidding threshold thus avoiding public oversight.”

    McGuiness illegally structured a series of payments, according to the DOJ, to MyCampaignGroup in order to remain under the state approval threshold. She later approached the company a second time, according to Jennings.

    “It’s important to keep this in mind, this was done by the State Auditor, whose job is literally to protect your tax dollars from this very kind of spending.”

    The investigation also uncovered what Attorney General Jennings said was “clear nepotism.”

    McGuiness’ daughter and a friend were employed by the office, neither of whom were interviewed, according to the investigation.

    As the pandemic triggered record unemployment across the country, Jennings said McGuiness fired an employee citing lack of work hours and two others left under the same premise, but despite that she still hired her daughter and her friend.

    “The defendant’s daughter enrolled in a college in South Carolina. For months, despite not coming into work, never logging in remotely, barely ever sending so much as an email, her daughter continued to receive taxpayer checks. Those paychecks were deposited into an account co-owned by her mother, the defendant,” Jennings said. “As of August, 2021 the defendant still employs her daughter on the state payroll.”

    McGuiness’ daughter has been paid over $19,000 in taxpayer dollars, according to the investigation, in addition to $8,000 paid to her daughter’s friend.

    “She used her power to hire her daughter no questions asked,” Jennings said. “She paid her daughter thousands of tax dollars even when her daughter wasn’t showing up to work. And when her staff discovered her misconduct, and did the right thing by speaking up, the Auditor, whose job is to be a government watchdog, engaged in an extensive pattern of surveillance and intimidation against those whistleblowers.”

    During the course of the investigation, officials discovered that McGuiness allegedly monitored and intimidated real or perceived whistleblowers.

    Over three dozen requests were submitted to monitor employees emails, including at least one former employee at a completely separate agency, according to the DOJ.

    Jennings stressed that the investigation remains ongoing and requested anyone with any pertinent information related to the investigation to come forward by calling (302) 577-5400.

    Multiple requests to reach McGuiness for comment have went unanswered.

    “If anyone should know better, it is the State Auditor,” Jennings said. “Instead, as our investigation has shown, Kathleen McGuiness carried out the very misbehavior that she was elected to stop.”