August 29, 2012
Former president of Allegheny Co. insurance agency charged in theft & insurance fraud scheme
HARRISBURG - Agents from the Attorney General's Insurance Fraud Section have filed criminal charges against the former president of a defunct Allegheny County insurance agency who is accused of stealing in excess of $150,000 in insurance premiums paid by various restaurants and bars.
Attorney General Linda Kelly identified the defendant as Carol A. Hughes, 56, of 161 Oak St. Monroeville.
Hughes allegedly used her position as president of the Morry Hoffman Insurance Agency (MHA), located at 1821 Golden Mile Highway, Pittsburgh, to orchestrate a theft scheme which stretched from 2007 through 2011, victimizing numerous businesses, insurance companies and premium financing companies.
Kelly said the Morry Hoffman Agency specialized in obtaining liquor liability and commercial liability insurance for restaurants and taverns until its license was terminated by the Pennsylvania Department of Insurance in February 2011.
According to the criminal complaint, Hughes misappropriated premium funds that had been paid to MHA by various clients, depositing the money in one large account and failing to forward those payments to the appropriate insurance companies.
Additionally, Hughes and MHA are accused of submitting applications to premium financing companies in the names of various businesses, without their knowledge or consent, in order to obtain funds that would purportedly be used to purchase insurance policies on behalf of those businesses.
Kelly noted that in some of these instances the businesses that were named on the financing applications had already paid the full insurance premiums that were due.
According to the criminal charges, the insurance premium money paid by various clients, along with funds from the premium financing companies were deposited into a single business account which was allegedly used to pay personal expenses for Hughes, along with food, travel and business expenses.
Hughes is charged with one count of participating in a corrupt organization, a first-degree felony punishable by up to 20 years in prison and a $25,000 fine.
Additionally, she is charged with one count of insurance fraud, three counts of theft by deception, two counts of theft by failure to make required disposition of funds and three counts of forgery, all third-degree felonies which are each punishable by up to seven years in prison and $15,000 fines.
Hughes is also charged with two counts of misapplication of entrusted property, second-degree misdemeanors which are each punishable by up to two years in prison and $5,000 fines.
Hughes was preliminarily arraigned today before Plum Magisterial District Judge Linda Zucco. Hughes was released on unsecured bail pending a preliminary hearing on September 19th, at 9 a.m. before Magisterial District Judge Zucco.
The case is being prosecuted in Allegheny County by Senior Deputy Attorney General Dennis A. Kistler of the Attorney General's Insurance Fraud Section.
(A person charged with a crime is presumed innocent until proven guilty)