The Lower Rio Grande Valley in deep South Texas is known throughout the insurance community as a place where business can take one down the wrong road, purposely or not.
The perception north of the Valley is one of deep seated corruption permeating the business of business, especially public sector business. Consequently there are insurance companies who have quietly red lined the Valley, refusing to do business there. Other companies look the other way, relying on an unwritten “Don’t Ask, Don’t Tell” pact in partnership with their brokerage relationships there.
Over the years there have been numerous stories coming out of the Valley about pubic and private corruption. Occasionally, and without any apparent rhyme or reason, more than a few offenders have been exposed, tried and convicted of bribery and other illegal schemes. As one convicted felon said at sentencing “It’s a common practice but it’s wrong.”
Once caught the punishment process begins. It starts with damaging publicity ruining reputations forever. Then comes a trial exposing detailed dirty laundry for the world to marvel at. And finally, the Verdict followed by obscurity. Life moves on.
One has to wonder why anyone would knowingly jeopardize their reputations, family, friends and livelihood for tainted money. Those exposed have to wonder “Was it worth it?” In some cases it’s plausible, in others not so much.
Here are two examples.
In Swetnam’s case crime certainly doesn’t pay. He lost everything including his house, property, insurance license and freedom.
In the Olivarez case it can be argued crime pays. Earning millions at public expense through bribing public officials earned him a $25,000 fine. no prison time, plus he kept his insurance license to continue selling insurance. His return on investment is impressive.
There is one commonality between the two. In both cases loss of reputation is forever.
SWETNAM
HARLINGEN — A Harlingen insurance broker has been sentenced to three years in federal prison for his role in a scheme to sell nonexistent windstorm policies to Valley Baptist Health System. Prosecutors said Michael N. Swetnam Jr., 47, helped to defraud VBHS out of more than $3.8 million by selling nonexistent and altered insurance policies.
He must pay VBHS nearly $3 million in restitution and forfeit a Los Fresnos home that was paid off using proceeds from the fraud, according to a statement this week by the U.S. Attorney’s Office.
Swetnam’s fraud sch- eme involved selling the hospital system both nonexistent windstorm policies and excess liability policies with premium amounts that he altered after receiving the policies from the insurer, prosecutors said. The scheme resulted in VBHS being defrauded out of approximately $3.8 million, prosecutors said.
Prosecutors alleged Swetnam met with Valley Baptist officials in Nuevo Progreso in 2006. There, prosecutor said, the insurance agent presented the hospital system with an insurance policy covering wind damage. “But the insurance never existed,” the statement said.
The indictment alleged Swetnam sent several invoices and documents pertaining to fraudulent insurance premiums through the U.S. mail.
OLIVAREZ
Admitted Felon Olivarez Goes Free – Beats Justice System – Maintains Texas Insurance License
Half Guilty, Half Pregnant Arnulfo Olivarez was sentenced yesterday for his crimes. This admitted felon paid bribes to public officials in exchange for lucrative insurance contracts worth millions of taxpayer dollars.
Arnulfo “Arnie” Cuahtemoc Olivarez
Insurance Agent
4 years probation
$25,000 dollar fine
Editor’s Note: The following is an excerpt published in the McAllen Monitor –
Arnie Olivarez: “I want to apologize to my family, especially my daughters and to everyone I’ve done business with.”
Arnie Olivarez: “It’s a common practice but it’s wrong.”
Judge Ricardo Hinojosa: “By doing that, you’re insulting every elected official and every business person who does it the right way, which I believe is the majority. They get hurt every time someone like you does what you did.”
Judge Ricardo Hinojosa: “This is not a victimless crime.”
Arnie Olivarez: “I hurt my family, lost my business, had to let go of of good friends. I’m trying to keep my insurance license. I had a major heart attack and I’ll have to take medication the rest of my life. I’ve been under house arrest the last three and a half years.”
Arnie Olivarez: “I want to apologize to the court and to everyone for all the things I did wrong.”
Judge Ricardo Hinojosa: “I wouldn’t be surprised if he deducted it on the federal income tax for his business making us all sponsors for this trip.”
Judge Ricardo Hinojosa: “I dont’ know how much profit your client made, I gathered it was a lot more than $10,000 dollars.”
Olivarez claimed his contract was worth $180,000 dollars per year for three years.
He said he got half, or about $90,000 dollars per year for three years, but had to use part of it to pay his own staff.
Olivarez claimed he told Cameron County Sheriff Omar Lucio and the former Hidalgo County Sheriff about bribery allegations. He said that went nowhere.
Olivarez said before he starting making “contributions” and “sponsorships” that the PSJA school illegally cancelled one of his previous contracts.
Judge Hinojosa said he should have gone to authorities and not “played along.”
Defense Attorney Heriberto “Eddie” Medrano: “He has been traumatized. This has been a three and a half year ordeal. He’s been waiting for this day.”
I could write a book of similar stories going back to 1973 but it would take too long to read. Plus I’m still in good health and want to remain that way.
