Houston Insurance Broker Pleads Guilty – Sold Fake Insurance Policies

“The owner of a Houston-based insurance brokerage faces up to 20 years in federal prison………………… ”

October 7, 2011 – 12:32 pm ET

HOUSTON—The owner of a Houston-based insurance brokerage faces up to 20 years in federal prison for selling a fake insurance policy to an upstate New York tour boat operator, then trying to retroactively limit the policy after a 2005 boating accident that killed 20 passengers.Christopher Purser, who owned Monarch Insurance Services Inc., pleaded guilty to one count of conspiracy to commit wire fraud in a Houston federal court on Wednesday.According to prosecutors, Mr. Purser sold Lake George, N.Y.-based Shoreline Cruises Inc. an insurance policy that included marine liability coverage for a 40-foot sightseeing boat called the Ethan Allen. The policy was underwritten by United Reinsurance Group Ltd., one of a number of shell companies he and five other co-defendants had founded as part of a fraud scheme dating back to 1999.Documents allegedly falsified, backdated

On Oct. 2, 2005, the Ethan Allen capsized on Lake George, killing 20 of its passengers. When Shoreline tried to collect on its insurance policy for the accident, prosecutors said Mr. Purser drafted a number of falsified backdated documents in an attempt convince the tour company that it never bought coverage for boating operations or accidents on Lake George.

All five of Mr. Purser’s co-defendants in the fraud scheme are still awaiting trial.

Prosecutors allege that, beginning in 1999, the group conspired to sell dozens of fake commercial insurance policies through a collection of fictional offshore insurers and business advocacy associations. The defendants allegedly sold general liability and life insurance policies to nursing homes, assisted living facilities, apartment complexes, condo associations, bars, restaurants and other businesses throughout the U.S., according to the indictment filed in February.

In addition to wire fraud, prosecutors have levied charges of money laundering and obstruction of justice against all or some of the defendants.