Former N.J. life insurance agent sentenced for $1.1 million scam
June 2, 2016 by IFAwebnews Staff
A former Essex County, N.J., insurance agent has been sentenced to six years in prison for submitting hundreds of fraudulent life insurance applications to reap more than $1 million in commission and bonuses from Massachusetts Mutual Life Insurance Company (MassMutual).
The sentence was announced by New Jersey’s Acting Attorney General Robert Lougy and the Office of the Insurance Fraud Prosecutor
Stanley Jerome, 33, of Orange, N.J., pleaded guilty to second-degree money laundering and insurance fraud in March. Jerome admitted to paying individuals for their identifying information which he then used to submit bogus life insurance applications to MassMutual to reap sales commissions and bonuses totaling $1,132,675. He was sentenced before Essex County Superior Court Judge Ronald Wigler.
Stanley Jerome
“Instead of working for his commission, like honest insurance agents, Stanley Jerome tricked MassMutual into issuing policies for straw applicants who had no intention of paying for them,” said Lougy. “His greed and deceit cost the insurance company more than $1 million but Stanley Jerome will now pay dearly with his freedom.”
“Prison is exactly where this defendant belongs,” said Acting Insurance Fraud Prosecutor Christopher Iu. “This type of fraud not only victimizes insurance companies, it hurts honest policy holders through increased insurance premiums.”
Because most of the applications were for low-income individuals, Jerome provided false employment, salary, and net worth information on the applications. For the applications that were approved, Jerome received an annualized commission. He also received bonuses and other payments in connection with those policies.
To hide his scam, Jerome used some of the money he received to make some premium payments on the policies, but most policies lapsed for non-payment within a few months. To make the fraudulent policies look more legitimate, Jerome offered additional cash payments to individuals who agreed to open bank accounts in their own names and remitted the account access information and cards to him. He used those accounts to submit direct-debit authorization forms to MassMutual authorizing the monthly withdrawal of premiums for those straw accounts.
From August 2013 to January 2015 Jerome transferred several hundred thousand dollars of ill-gotten commission into those accounts to make payments on the insurance premiums.
