Sent inflated invoices to insurance companies and pocketed the money
New Albany - Josh J. Minkler, United States Attorney, announced today that three Louisville-area men were sentenced in federal court on fraud charges. U.S. District Judge Sarah Evans Barker sentenced Travis O. Kiser, 43, Louisville (18 months), Kevin J. O’Donnell, 44 Louisville (15 months) and David Gibson, 45, Floyds Knob (one year and one day) after their convictions for wire fraud and money laundering.
“Defrauding insurance companies has an immediate impact on all of us through higher premiums," said Minkler. “When emergencies arise and people need their insurance companies, they deserve honest and quick acting service from all who process the claim"
Between 2011 and 2014, Travis Kiser conspired with O’Donnell and Gibson to defraud Farm Bureau and Cincinnati Insurance companies in excess of $340,000.
Gibson was employed by Indiana Farm Bureau Insurance Company as a field claims adjuster in New Albany, Indiana. Kiser was employed by Belfor USA, a restoration company located in Louisville, Kentucky, as a marketing manager. The two orchestrated the scheme by creating an artificial company, Derby City Solutions LLC, to submit inflated invoices to Farm Bureau for emergency services actually performed by Belfor. Kiser would use cashier’s checks payable to Belfor to hide the existence of his sham company. The two would then split the fraudulent proceeds which totaled approximately $126,360.
In a second scheme, Kiser and O’Donnell formed a company called River City Solutions, LLC, which originally was legitimate but later was used solely to defraud the Cincinnati Insurance Company (CIC). The scheme was similar to the previous one. O’Donnell was a field claims superintendent for CIC in Louisville, Ky. He would submit false or inflated invoices for emergency restoration to CIC for payment. They used their pass- through company, River City to defraud the insurance company. Often times the pair would submit invoices that were inflated, the work was performed by another company or never performed at all. They used cashier’s checks payable to the company that legitimately performed the services to hide their fraud. The total loss to CIC was approximately $216,332.
Some of the emergency work being performed was a result of the New Pekin and Henryville tornadoes from February 2012.
This case was investigated by the Internal Revenue Service, Criminal Investigation who Judge Barker lauded for their efforts in such a complex and sophisticated scheme.
IRS Criminal Investigation Special Agent in Charge Stephen Boyd stated, “Insurance fraud impacts almost all honest American citizens because the cost of this crime comes out of all of our pockets. IRS Criminal Investigation special agents are experts in tracing the flow of money which assisted the investigative team in uncovering the three guilty individuals who will be held accountable with time in prison."
According to Assistant United States Attorney James M. Warden, who prosecuted this case for the government, all three men must serve a period of supervised release after their sentence, some of which is on home detention. They must also make full restitution for the money they stole.
Source: U.S. Department of Justice, Office of the United States Attorneys
