HARRISBURG, PA — Attorney General Josh Shapiro today announced the owner of a Montgomery County insurance agency who defrauded clients out of $97,000 in inflated premiums has pleaded guilty to insurance fraud and made full restitution to the clients.
Thomas Harbaugh, 60, of York Road, Hatboro, pleaded guilty today in Montgomery County Court to insurance fraud and failure to make required disposition of funds, both felonies.
As president and owner of Miller & Cornell, Harbaugh altered insurance policies and inflated premiums on policies sold to HighPoint Solutions and Randy Bardol Wallcovering – to make it look like the clients had more coverage than Harbaugh actually secured for them. Harbaugh committed the fraud without the knowledge of either client, and stole $97,471 from them over five years.
“This defendant – who served on Hatboro Borough Council and the boards of the Hatboro Chamber of Commerce and a local bank – betrayed his clients, sacrificed his ethics and broke the law,” said Attorney General Josh Shapiro. “Insurance fraud is a crime and we prosecute it fully.”
After pleading guilty, Harbaugh was sentenced by Montgomery County Judge William R. Carpenter to six months of house arrest, followed by more than six additional years of supervision. He was ordered to pay full restitution, which he did at sentencing, plus court costs and an additional civil penalty of $5,000. As a condition of his sentence, Harbaugh is prohibited from acting as an insurance agent or be employed in any fiduciary capacity.
The case against Harbaugh followed a referral from an insurance provider from which Harbaugh purchased policies. Office of Attorney General agents worked with the Pennsylvania Insurance Department to review evidence – including policies that were altered by Harbaugh and fraudulently sold to both companies.
In the case of one client, HighPoint Solutions, Harbaugh secured a $3,000,000 single loss limit for the company on its 2015-2016 policy, but altered the policy to state it was a $5,000,000 single loss limit. Harbaugh then billed HighPoint Solutions for the increased coverage, overcharging the company by nearly $5,000. He also accepted premium payments to purchase policies he never bought – and kept the defrauded payments for himself.
When Harbaugh was confronted by investigators, he admitted to changing policies to reflect higher limits and premiums and misleading the businesses. Harbaugh created invoices to reflect the inflated premiums and charged the clients more than they actually owed.
The case was prosecuted by Senior Deputy Attorney General M. Eric Schoenberg.
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