A Raleigh man has been sentenced to more than one year of prison time after pleading guilty to accusations of wire fraud and money laundering. Apart from prison time, Massey was also ordered to complete three years of supervised release and to pay over $860,000 in restitution.
According to federal prosecutors, Paul Richard Massey, 51 years of age and a resident of Shady Spring, admitted to issuing fraudulent payments as an insurance claims adjuster and using the money to fund a powersports business he owns.
Allstate had provided Massey with the authority to investigate assigned claims as well as determine coverage and work with insured customers and other stakeholders to resolve the disputed claims. Among other things he was entrusted was issuing settlement check payments to policyholders and businesses.
The federal prosecutors said Massey admitted to authorizing and issuing a check on Dec. 26, 2018 amounting to more than $15,000 on behalf of Allstate to a business called American Mitigation Services LLC, also known as AMS Cleaning. The check issued for AMS Cleaning was allegedly for work performed and thus deposited into AMS Cleaning’s bank account. Massey admitted it was fraudulent as AMC Cleaning completed no work to justify the payment.
Massey also admitted that he had a business relationship with AMS Cleaning and was an authorized signer on the business’ bank account.
Among the things Massey admitted was authorizing and issuing 68 fraudulent claim payment checks on behalf of Allstate amounting up to over $850,000 to AMS Cleaning between January 2018 and June 2019, federal prosecutors said.
Massey had attempted to cover the fraudulent nature of some of the checks by creating fraudulent receipts and documents. He also used the fraudulent claims payments deposited in AMS Cleaning’s bank account to fund Massey Powersports LLC, which he owned and operated.
The investigations revealed Massey routinely wrote checks from AMS Cleaning’s bank account to fund Massey Powersports, including payments for employees and purchasing inventory as well as paying for recurring bills.
Massey also admitted that in December 2018, he wired more than $100,000 from AMS Cleaning’s bank account to a North Carolina business in a fraudulent transaction to prepay for tractors intended for Massey Powersports, federal prosecutors said.
They also Massey attempted to conceal his scheme from investigators by falsely stating that he had no financial interest in AMS Cleaning. They said he had also provided the FBI special agents with a detailed, false story about this fraudulent story.
In response to a federal grand jury subpoena, Massey created and submitted a fictitious $1 million contract to supposedly show AMS Cleaning was sold to a fictitious company prior to his scheme.
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