Insurance has plenty of family businesses – but this type of family business is not something the industry would want to promote.
A man based in Highlands, New Jersey, has been arrested, along with his parents, for allegedly running a life insurance scheme that saw them sell policies and collect as much as $4 million from insurance firms.
According to the New Jersey Attorney General, as reported by
Middletown Patch, Evan Pescatore, 35, and his parents Frank Pescatore, 70, and Janice Pescatore, 64, face charges of first degree conspiracy to commit money laundering, as well as two counts of second degree money laundering as part of an indictment that has been passed on to the grand jury.
It is alleged that the father-son team “approached and recruited” 13 applicants while offering them supposed “free insurance” with the chance to sell on their policy later for a profit. It is stated that they misrepresented to eight insurance companies that the insureds would pay for their own policies and that no “free insurance” was offered. In fact, it is reported that the younger Pescatore actually took out third party loans to pay for the premiums on the policies which were issued by companies including
Genworth Life Insurance,
AXA Equitable Life Insurance,
Allianz Life Insurance,
Zurich American Life Insurance, Lincoln Benefit Life Insurance, Minnesota Life Insurance, Banner Life Insurance and Royal Neighbors of America.
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It is said that when the companies attempted to disburse the commissions – which totalled more than $3 million – Evan and his parents transferred, or assisted in transferring, the commission funds to the lending sources in order to repay the loans for the insurance premiums.
In addition to the charges outlined above, Evan Pescatore was charged with first degree money laundering, while he and his father both face charges of insurance fraud.
“Rebating fraud is a costly problem for insurance companies but the ultimate victim is the consumer. They’re the ones who pay the price in the form of higher premiums,” Acting Insurance Fraud Investigator Christopher Iu told the publication. “These indictments should serve as a warning that we will not allow criminals to get rich by cheating the insurance system and driving up costs for honest policyholders.”
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