Former Cargo Insurance Broker Sentenced to Prison - Global Trade Magazine
  September 1st, 2015 | Written by

Former Cargo Insurance Broker Sentenced to Prison

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  • Former cargo insurance broker sentenced to four years in prison and three years of supervised release.
  • Defendant issued policy binders falsely representing that Lloyd’s of London would provide insurance coverage.
  • Nearly 800 trucking companies in 20 states paid $3.75 million in premiums for fraudulent insurance policies.

John Paul Kill, the former operator of Appeal Insurance Agency, LLC, has been sentenced to four years in federal prison for insurance fraud. Kill was convicted of illegally collected over $3.7 million from nearly 800 trucking companies nationwide for selling and brokering fictitious cargo insurance policies.

Kill, 63, was sentenced by U.S. District Court Judge Eleanor L. Ross to four years in federal prison to be followed by three years of supervised release, and he was ordered to pay $1.23 million in restitution to victims. Kill was convicted on this charge on May 6, 2015, after he pleaded guilty.

This case was investigated by the Federal Bureau of Investigation and the Georgia Office of Commissioner of Insurance.

According to prosecutors, John Kill operated an insurance brokerage firm in Norcross, Georgia and began offering cargo insurance policies to trucking companies in 2013. Kill issued policy binders to clients falsely representing that Lloyd’s of London would provide insurance coverage. In reality, Kill never brokered any agreement with Lloyd’s to provide coverage and instead pocketed the premium payments. 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 from new victims.

“The defendant held himself out as an honest broker to hundreds of trucking companies, but he simply pocketed their premium payments instead of securing legitimate insurance coverage,” said U.S. Attorney John Horn. “His scam tricked clients into believing they had proper insurance coverage and endangered small businesses operating in more than 20 states.”

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.