Former Insurance Broker Pleads Guilty to Nationwide Phony Trucking Cargo Insurance Fraud Scheme
ATLANTA - John Paul Kill, the former operator of Appeal Insurance Agency, LLC, has pleaded guilty to a charge of insurance fraud. Kill collected over $3.7 million from nearly 800 trucking companies nationwide for fraudulent cargo insurance policies.
“This defendant swindled hundreds of trucking companies into purchasing phantom cargo insurance policies,” said Acting U.S. Attorney John Horn. “Kill abused his clients’ trust and led many small businesses to operate on our roads unwittingly without proper insurance and put them at risk for catastrophic losses.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “This case was about theft and greed on a large scale. Mr. Kill displayed a complete disregard for his client companies, leaving them legally and fiscally vulnerable while allowing them to believe that they had appropriate insurance coverage. The FBI is pleased with the role it played in bringing this case forward for prosecution and holding Mr. Kill accountable for his criminal actions.”
“I applaud Acting U.S. Attorney John Horn for his handling of this case,” said Insurance Commissioner Ralph Hudgens. “I hope this guilty plea sends a clear signal that my office, and federal authorities, will take decisive action if we catch someone scamming Georgia consumers.”
According to Acting United States Attorney Horn, the charges and other information presented in court: Kill operated an insurance brokerage firm, Appeal Insurance Agency, LLC, in Norcross, Georgia and began offering cargo insurance policies to trucking companies in 2013. Kill falsely represented to clients that he would bind cargo insurance policies through Lloyd’s of London. In the insurance industry, binding coverage serves as an agreement between the insurance provider and insured parties to provide insurance coverage. In reality, Kill did not bind any policies with Lloyd’s and instead pocketed the premium payments.
For a small portion of victims, Kill bound cargo insurance policies through a different company that offered less extensive coverage than what the trucking companies thought they purchased through Kill. Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected for new policies.
In total, nearly 800 trucking companies located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia paid approximately $3.75 million in premiums for these fraudulent insurance policies from 2013 through mid-2014.
Kill, 63, of Norcross, Georgia, pleaded guilty before U.S. District Court Judge Eleanor L. Ross. Sentencing for Kill is scheduled for July 10, 2015, at 10:00 a.m.
This case is being investigated by the Federal Bureau of Investigation and the Georgia Office of Commissioner of Insurance.
Assistant United States Attorney Nathan P. Kitchens is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.