Two Delaware County Men Charged In $21 Million Insurance Financing Fraud Scheme
PHILADELPHIA – United States Attorney William M. McSwain announced that Christopher Hogg, 61, of Bryn Mawr, PA, and Rennie Rodriguez, 52, of Broomall, PA were arrested and charged by complaint with conspiracy to commit wire fraud in a multi-million dollar insurance premium financing fraud scheme. Hogg was arrested in New York City on Tuesday and had his initial appearance before a United States Magistrate Judge yesterday in the Eastern District of Pennsylvania. Rodriguez was arrested earlier this week at his office in Broomall and had his initial appearance on Tuesday in the Eastern District of Pennsylvania.
The complaint alleges that Rodriguez, a licensed insurance broker, and Hogg, a businessman, conducted a scheme involving the issuance of fraudulent insurance premium finance loans, which were originated by an insurance premium finance company and funded by banks. They conducted this scheme with the assistance of a third person who was an employee of the insurance premium finance company. Between at least November 2016 and January 2018, the employee approved approximately 37 premium finance loans, or loan supplements, originated by insurance agencies controlled by Rodriguez, purportedly to purchase policies to insure entities owned or controlled by Hogg and/or Rodriguez, or in a few instances controlled by other individuals. These loans were purportedly for the purpose of financing insurance premiums. However, as Hogg, Rodriguez, and the employee knew, there were no underlying insurance policies, and Hogg and Rodriguez used the proceeds for other purposes. The loans totaled approximately $21,357,645.
Instead of paying insurance premiums (because there were no actual insurance policies), Rodriguez kept some of the proceeds for himself and distributed most of the other proceeds to bank accounts controlled by Hogg, or in a few instances to other individuals/entities. Rodriguez and Hogg used some of the proceeds from newer loans to make loan payments to the premium finance company or to the banks on older loans. Had loan payments not been made on at least some loans, the premium finance company and the banks likely would have become suspicious. Additionally, between approximately October 2016 and December 2017, Hogg made approximately 40 kickback payments, totaling $873,118, to the finance company employee who had approved the fraudulent loans. The employee has admitted to law enforcement that these payments were made to him because he approved the bogus loans.
“Licensed insurance brokers are supposed to act like trusted professionals, not crooks,” said U.S. Attorney McSwain. “The allegations here are particularly disturbing because of the lengths these two defendants allegedly went to in order to perpetuate their fraud and the huge amount of money they were able to steal through this scheme.”
“The ability of IRS Special Agents to follow the money trail is essential for conducting not only tax investigations, but also for proving cases like this”, said Guy Ficco, Special Agent in Charge of IRS-Criminal Investigation. “Those who conduct this type of fraud should know that they will be held accountable by IRS-CI and our law enforcement partners, and they will have to face the consequences of their actions.”
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Karen Grigsby.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.