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Feb. 2, 2010

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(HOUSTON) - Rachel Marie Rossow, 44, of Farmington, Conn., and John Frederick Prestage, 39, of Newington, Conn., both former employees of The Hartford have pleaded guilty to conspiring to commit mail fraud and wire fraud, United States Attorney Tim Johnson announced today.

Rossow and Prestage pleaded guilty this morning during a hearing before United States District Judge David Hittner. Each admitted that while employed with The Hartford, located in Hartford, Conn., and involved in the settlement of silica-related claims brought by a Houston area attorney, they engaged in a conspiracy to defraud their employer by accepting new BMWs and hundreds of thousands of dollars in payments from the Houston attorney. Prestage was a claim handler and worked on claims brought against The Hartford and its subsidiaries by the Houston attorney. Rossow was a team leader for The Hartford and also involved in settling the claims brought by the Houston attorney. Neither disclosed the receipt of the payments to The Hartford. Prestage received in excess of $500,000 while Rossow received two separate payments of $312,500 and a third payment of $1,675,000.

Per their agreement with the United States, Prestage and Rossow face a maximum sentence of 24 months imprisonment and 36 months imprisonment, respectively. Sentencing is set for May 17, 2010. Additionally, Prestage agreed to forfeit to the United States a Volvo XC90 automobile which had been purchased with the proceeds of the conspiracy. Rossow agreed to forfeit her interest in approximately $2,600,000 in proceeds of the conspiracy as well as forfeiting to the United States the BMW 530ia she received.

The trial of attorney Warren Todd Hoeffner, accused with Rossow and Prestage, for his alleged involvement in the conspiracy ended in a mistrial in October 2009. Hoeffner filed an appeal seeking to reverse the district court’s ruling that a retrial following a hung jury resulting in a mistrial is not precluded on double jeopardy grounds. The plea agreement entered into by Prestage and Rossow provides each the option to withdraw their pleas of guilty if the United States 5th Circuit Court of Appeals bars the prosecution of Hoeffner on double jeopardy grounds. The appellate court’s decision is pending.

The case was investigated by the San Antonio and Houston Field Offices of the Internal Revenue Service Criminal Investigation Division. Assistant United States Attorneys John R. Braddock and Quincy L. Ollison are the prosecutors assigned to the case.


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