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Feb. 18, 2011

“INSURERS” OF THE ETHAN ALLEN INDICTED IN ALLEGED INSURANCE FRAUD SCHEME

(HOUSTON) - Christopher Purser, 49, of Houston, and five other defendants have been charged with wire fraud, conspiracy to commit wire fraud and conspiracy to launder money in a superseding indictment returned on Feb. 16, 2011, by a Houston grand jury, United States Attorney José Angel Moreno and Internal Revenue Service Criminal Investigations (IRS-CI) Special Agent in Charge Rodney E. Clarke announced today.

Purser and his co-defendants are alleged to have conspired to sell fake and fraudulent liability insurance policies to nursing homes, assisted living facilities, apartment complexes, condominium associations, bars, restaurants and, eventually, to a company called Shoreline Cruises Inc., which operated a tour boat called the Ethan Allen on Lake George, New York. The Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 elderly tourists. At the time, reports circulated in the press that the vessel's insurance policy may have been bogus.

Charged along with Purser are:  Malchus Irvin Boncamper, 56, of Basseterre, Federation of St. Kitts and Nevis, West Indies; Marc-Thibaud Duchesne, 49, a British citizen formerly residing in Houston; William Ballachey, 64, of Brossard, Canada; Edmund Hugh Benton, 52, of Scottsdale, Ariz.; and Robert Steve Mills, 55, formerly a resident of Dallas, Texas, and Ft. Myers, Fla.  Mills was also charged with obstruction of justice for attempting to influence a person to testify falsely before a federal grand jury in Houston in 2009.

According to allegations contained in the superseding indictment, Purser controlled an insurance brokerage firm in Houston called Monarch Insurance Services, which sold fake liability insurance policies during 2000-2001 to nursing homes and assisted living facilities around Texas and the United States. Purchasers allegedly paid millions of dollars for the insurance only to discover that it was fake when insurance companies denied liability and began filing lawsuits against Purser and Monarch. Thereafter, operating through Abenefit associations@ called International Property Owners Association and Global Property Owners Association, Purser allegedly sold fake and fraudulent liability insurance policies to apartment complexes, condominium associations, bars, restaurants and the operator of the Ethan Allen.

The indictment alleges Purser backdated documents after the Ethan Allen accident to make it appear that Shoreline Cruises had not purchased coverage while the vessel was operating on Lake George when, in fact, Shoreline had purchased exactly that type insurance policy. The indictment also alleges that none of the insurance companies involved in Ethan Allen's insurance policy had the financial ability to pay the claims.

The indictment also alleges Purser and the other defendants conspired to launder proceeds of the fraud through bank accounts in The Bahamas, Canada, Hong Kong, Liechtenstein, Nevis, Nicaragua and St. Kitts.

Purser was arrested by IRS-CI agents on Feb. 17, 2011, in Houston and is scheduled to make an initial appearance this afternoon or Tuesday before a U.S. Magistrate Judge. 

According to the indictment, Boncamper, a Chartered Certified Accountant, operated an accounting and corporate services business on the island of St. Kitts that owned and formed Ashell@ insurance companies in the Caribbean, including the companies that purportedly insured the Ethan Allen. Boncamper also allegedly prepared fraudulent financial statements and audit reports for those companies. Boncamper's fraudulent documents, according to the indictment, were transmitted to Shoreline Cruises Inc. in New York to create the false appearance that its insurers had financial strength.

Boncamper was arrested on Jan. 14, 2011, at Miami International Airport after arriving on a flight from St. Kitts. Following a Jan. 21, 2011, hearing in federal court Miami, Fla., U.S. Magistrate Judge Patrick White ordered Boncamper to remain in custody without bond pending his trial. Judge White found that no conditions of release could reasonably assure Boncamper=s presence at trial because of Boncamper=s strong family and financial ties outside of the United States. 

Duchesne, who allegedly sometimes used the name Dr. Carl Von Wasserman, is accused of having arranged for Boncamper=s shell companies to acquire fraudulent Eurobonds guaranteed by a non-existent Swiss financial institution. Duchesne is also charged with having produced fake financial statements and an audit report by fictitious Aindependent accountants@ which was then sent to Shoreline Cruises in Lake George, N.Y. On Jan.16, 2010, while awaiting possible extradition to the United States to face charges pending in the District of Columbia, Duchesne escaped from a British prison and disappeared. At this time, Duchesne is a fugitive. 

Ballachey, who ran several businesses near Montreal, Canada, claimed to have arranged for four different Indonesian insurance companies to reinsure policies purchased by nursing homes and other businesses in the United States, according to the indictment. Allegedly, all of the reinsurance that Ballachey procured was completely fake. Ballachey was subsequently indicted in New York for wire fraud and conspiracy. Ballachey has not been apprehended and remains a fugitive. 

According to the Houston indictment, Benton was a close business associate of Matthew Schacter, a fugitive in Barbados who lived under various false names and controlled dozens of fake Caribbean insurance companies. Benton and Schacter allegedly arranged for one of those companies, Heritage Mutual Surety Limited, of Nevis, to provide insurance to apartments and condominiums in Texas during 2003 and helped to launder insurance premiums through bank accounts in Nicaragua, St. Kitts and The Bahamas.

Schacter - Benton=s alleged business partner - engaged in various transactions during the late 1990s and early 2000s that led insurance regulators from 10 U.S. states and Canadian provinces to file cease and desist orders. In 2004, Schacter was charged in a federal criminal complaint in Sacramento, Calif., with insurance fraud. He was arrested during a trip to Canada, extradited to the United States and died in custody on Oct. 2, 2005, the very same day that the Ethan Allen sank on Lake George, N.Y. Benton’s current whereabouts are unknown.

Mills is charged with having controlled the Ashell@ insurance companies formed by Boncamper in St. Kitts and Nevis and allegedly worked closely with Purser to sell fake and fraudulent insurance policies. Mills collected premiums from the sale of those policies in bank accounts in Managua, Nicaragua, according to the indictment.

On Jan. 10, 2011, Mills was arrested by IRS-CI agents in Bonita Springs, Fla., as a result of a warrant that issued following the filing of a criminal complaint which charged him with having attempted to influence his daughter to lie to a federal grand jury in Houston investigating the insurance fraud scheme. Mills was ordered temporarily detained and transported to Houston where a federal magistrate judge will schedule a hearing to determine whether he should be released on bond or detained pending his trial.

Anyone with information about the whereabouts of Duchesne, Ballachey or Benton is asked to call (281) 721-7766.

The conspiracy, wire fraud and obstruction of justice charges each carry a maximum statutory penalty of 20 years imprisonment and a fine of not more than $250,000. 

The charges are the result of an intensive investigation conducted by the IRS-CI with assistance from Immigration and Customs Enforcement - Homeland Security Investigations, the Texas Dept. of Insurance, the New York State Dept. of Insurance and the California Dept. of Insurance. During this four-year investigation, the U.S. government also received extensive and valuable assistance from the governments of St. Kitts and Nevis and also St. Vincent and the Grenadines. Investigators also received valuable assistance from the governments of The Bahamas, Nicaragua, The Philippines and Australia.

Assistant U.S. Attorneys John R. Lewis and Belinda Beek will be prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.

 

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