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August 9, 2006
FOR IMMEDIATE RELEASE
MTA POLICE OFFICER INDICTED IN ARSON AND INSURANCE FRAUD SCHEME
Scheme Resulted in Losses Exceeding $106,000
BALTIMORE, Maryland - A federal grand jury has indicted James Walthall, age 40, of Randallstown, Maryland, for mail fraud and use of fire to commit mail fraud, in connection with an arson and insurance fraud scheme involving several vehicles, announced United States Attorney for the District of Maryland Rod J. Rosenstein. The indictment, which was returned yesterday, was unsealed today upon the arrest of the defendant.
The seven count indictment charges Walthall, a police officer for the Maryland Transit Administration (MTA), with engaging in a scheme to dispose of four vehicles – two vehicles owned by Walthall and two vehicles owned by other MTA employees - in order to avoid repossession and further loan payments and to have the car insurance companies pay the outstanding loan balances on the vehicles.
United States Attorney Rod Rosenstein said, “Insurance fraud drives up costs for all Maryland drivers. This case shows that people who facilitate such fraud – no matter what their occupation – will be identified and prosecuted.”
Douglas Deleaver, Chief of Police, Maryland Transit Administration stated, “Integrity is a priority of our police force. We have worked closely with the U.S. Attorney’s Office to bring this matter to an indictment. Walthall has had his police powers suspended since the inception of this case and has not worked in any police capacity.”
Specifically, the indictment alleges that on February 26, 1999, Walthall falsely reported to the Baltimore City Police Department and to Allstate Insurance Company that his 1997 Nissan Quest had been stolen, when Walthall knew that he had caused the car to be burned the day before. In May 1999, Allstate Insurance Company paid the fraudulent insurance claim, sending the outstanding debt owed on the Quest to Household Finance Corporation, the company that held the loan.
The indictment further alleges that Walthall also caused a second vehicle he owned to be burned, a 1997 Ford Expedition. According to the indictment, in February 2003, Walthall reported his car stolen and filed a fraudulent insurance claim with State Farm Insurance Company. As a result, in March 2003, State Farm paid money to Ford Motor Credit, which held the loan on the vehicle at the time of its alleged theft. Then, in April 2003, Walthall caused the burning of the 1997 Ford Expedition.
The indictment further alleges that in December 2003 Walthall advised Lucretia Westbrook, an MTA bus and van driver, that he could dispose of Westbrook’s 2003 Chevrolet Tahoe in return for money. On December 15, 2003, Walthall picked up the Chevrolet Tahoe from Westbrook. Walthall then caused the burning of the Chevrolet Tahoe. After the burning, Westbrook submitted a fraudulent insurance claim that resulted in State Farm paying money to MTA Employees Credit Union, the lienholder on the Chevrolet Tahoe.
On December 31, 2003, Ronald Lurz, another MTA Police Officer, and Walthall made arrangements to burn Lurz’s 2003 Audi Quattro TT so Lurz could collect the insurance proceeds. On January 1, 2004, Lurz gave the Audi Quattro to Walthall, who caused it to be burned. Lurz then filed a fraudulent insurance claim with State Farm, claiming that the vehicle had been stolen, and State Farm paid the insurance claim money to MTA Employees Credit Union.
Walthall faces a maximum penalty of life imprisonment, five years of supervised release, and a $250,000 fine for each count of using fire to commit mail fraud. Walthall faces a maximum penalty of 20 years imprisonment, three years of supervised release, and a $250,000 fine for each count of mail fraud. The defendant is scheduled for an initial appearance on August 9, 2006, at 3:00 p.m.
Lucretia Westbrook, age 35, of Baltimore, and Ronald Lurz, age 35, of Baltimore, have both been separately charged in connection with the scheme.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the investigative work performed by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Baltimore City Police Department, and the Maryland Transit Administration. Mr. Rosenstein thanked Assistant U.S. Attorneys Harry M. Gruber and Stephanie A. Gallagher, who are prosecuting the case.
This page last modifiedAugust 9, 2006