AUSA VICKIE E. LEDUC at 410-209-4885

August 31, 2006

BEL AIR MAN SENTENCED FOR INSURANCE FRAUD, GUN CHARGE AND MAKING A FALSE STATEMENT IN A PASSPORT APPLICATION

Folder in Defendant’s Car Marked “Scams”

BALTIMORE, Maryland - Michael Charles Horner, age 46, of Bel Air, Maryland, was sentenced today to 54 months in prison, followed by 3 years of supervised release for mail and wire fraud charges in connection with an insurance fraud scheme in Maryland, and being a felon in possession of a firearm and making a false statement in a passport application, charges filed in the Eastern District of Pennsylvania and the District of South Carolina, respectively. U.S. District Judge William M. Nickerson also ordered to pay restitution of $208,158.

United States Attorney Rod J. Rosenstein said, “When Mr. Horner was caught, he had a file folder labeled 'Scams.' Thanks to the coordinated law enforcement effort in this case, Mr. Horner will not be able to add any more successful scams to his folder during his 4 ½ year stay in federal prison."

A. The Insurance Fraud Scheme

According to the statement of facts provided to the court as part of his plea agreement, from 2002 to 2004, Horner owned a body shop known as Contemporary Automotive (CA) in Bel Air, Maryland. Through his business, Horner would buy, sell, and repair used vehicles and would come into the possession of severely damaged vehicles. Beginning as early as January 2002, Horner developed a fraud scheme where he would take the vehicle identification numbers (“VINs”) off an undamaged vehicle in CA’s possession and place it on a severely damaged vehicle. Horner would then have an accomplice file an insurance claim on the damaged vehicle with the fraudulent VIN. After the insurance company received the claim and completed the appraisal, the company would mail and/or wire settlement funds back to Horner’s accomplices. The co-conspirators endorsed these checks to CA, and Horner deposited them into a CA bank account, kicking back a portion of the proceeds to the co-conspirators as payment for their assistance. After the settlement of the fraudulent claims, Horner returned the VIN to the original undamaged vehicle. Horner then re-titled and sold the undamaged vehicle to an innocent party who was unaware that a substantial insurance claim had previously been made using the vehicle’s VIN.

Between 2002 and 2004, Horner and his co-conspirators filed no less than eight fraudulent claims and obtained at least $288,158.

B. False Statements in Passport Application

On June 28, 2004, Horner applied for a U.S. passport in South Carolina using the false name of “Larry Keith Reprogel.” The application contains a statement that the applicant affirms that the statements made on the application are true. The true Larry Keith Reprogel is currently in a coma and receiving treatment at the Johns Hopkins Geriatric Unit in Baltimore, Maryland.

C. Horner’s Arrest and Gun Possession

On June 1, 2005, the U.S. Marshals arrested Horner in his room at a hotel in Malvern, Pennsylvania. The U.S. Marshals seized various U.S. passports, driver’s licences and a beginner’s learner permit, identification cards and a check card in the names of other individuals, but bearing Horner’s photograph. U.S. Marshals discovered a white Toyota Sequoia with a Maryland license tag registered to Horner in the hotel’s parking lot. Inside the Toyota Sequoia law enforcement officers observed two crates containing numerous file folders. One of the folders was marked with the word “SCAMS.” Several other folders were marked with what appeared to be names of other individuals, including one that was marked “REPROGEL - BIRTH.” In a search of the vehicle, U.S. Postal Inspectors recovered $86,301 in cash; a loaded .45 caliber pistol; documents related to Horner’s insurance and identity fraud schemes; blank social security cards and fraudulent social security cards; more fraudulent identification documents bearing Horner’s picture; and bank cards containing aliases associated with Horner. U.S. Postal Inspectors interviewed Horner who stated that he had been committing bank fraud and insurance fraud for the past 20 years.

United States Attorney Rod J. Rosenstein praised the investigative work performed by the U.S. Postal Inspection Service, Maryland Attorney General’s Office - Insurance Fraud Division and the U.S. Marshal Service.

Mr. Rosenstein also thanked the United States Attorney’s Offices for the District of South Carolina and the Eastern District of Pennsylvania for their valuable assistance. Mr. Rosenstein commended Assistant U.S. Attorneys Kwame J. Manley and Jefferson M. Gray, who prosecuted the case.