Raleigh County Man Pleads Guilty to Federal Fraud Crimes
For Immediate Release
U.S. Attorney's Office, Southern District of West Virginia
Scheme Involved More than $850,000 in Fraudulent Claims Payments
BECKLEY, W.Va. – Paul Richard Massey, 50, of Shady Spring, pleaded guilty today to wire fraud and money laundering. Massey admitted to issuing fraudulent payments as an insurance claims adjuster and using the money to fund a powersports business that he owns.
According to court documents and statements made in court, Massey was employed as a claims adjuster for Allstate Insurance Company from 2015 until June 2019. Massey was routinely assigned claim files to investigate after Allstate customers filed a claim under their insurance policy. Massey’s job included investigating assigned claims, determining coverage, and coordinating with the insured customer and others to determine what services were needed to bring a claim to conclusion. In his role as claims adjuster, Massey had the authority to issue settlement check payments to policy holders and businesses on behalf of Allstate to settle insured property damage claims.
Massey admitted to authorizing and issuing a $15,110.29 check on behalf of Allstate to a business called American Mitigation Services LLC, also known as AMS Cleaning, on December 26, 2018. The check was issued for mitigation work allegedly performed by AMS Cleaning and was deposited into AMS Cleaning’s bank account. Massey admitted that this payment was fraudulent, as AMS Cleaning had completed no work to justify the payment. Massey further admitted that he had a business relationship with AMS Cleaning and was an authorized signer on the business’s bank account.
Massey also admitted that he authorized and issued 68 fraudulent claim payment checks totaling more than $850,000 on behalf of Allstate to AMS Cleaning from at least January 22, 2018, until at least June 19, 2019. Massey attempted to hide the fraudulent nature of some of these checks by creating fraudulent receipts and documents that appeared to justify the payments.
Massey used the fraudulent claims payments deposited in AMS Cleaning’s bank account to fund Massey Powersports LLC, a Beckley business owned and operated by Massey. The investigation revealed that Massey routinely wrote checks from AMS Cleaning’s bank account to pay Massey Powersports employees, to purchase inventory for Massey Powersports, and to pay Massey Powersports’ reccurring bills. Massey admitted that on December 27, 2018, he wired $105,403.20 in fraudulently obtained proceeds from AMS Cleaning’s bank account to a North Carolina business to prepay for tractors intended for Massey Powersports.
Massey attempted to conceal his scheme from investigators. On June 27, 2019, Massey falsely told an Allstate fraud investigator that he had no financial interest in AMS Cleaning. On August 14, 2020, Massey created and submitted a fictitious $1 million sales contract for AMS Cleaning in response to a federal grand jury subpoena. On January 22, 2021, Massey falsely told a Federal Bureau of Investigation Special Agent that he had negotiated the sale of AMS Cleaning with an individual identified by Massey as “Jerry Wayne.”
Massey is scheduled to be sentenced on August 4, 2023, and faces a maximum penalty of 30 years in prison, three years of supervised release, and a $500,000 fine. Massey owes $862,871.29 in restitution.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI), and the Litigation Financial Analyst with the U.S. Attorney’s Office.
United States District Judge Frank W. Volk presided over the hearing. Assistant United States Attorney Ryan Blackwell is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:22-cr-219.
Updated April 20, 2023