Claims Adjuster Forfeits Beach House, Will Serve Prison Time for Fraud Scheme
A former Allstate claims adjuster will spend one year and a day in prison and forfeit his beach house and pickup truck to the federal government after pleading guilty to wire fraud and money laundering.
Federal prosecutors say 51-year-old Paul Richard Massey, of Shady Spring, West Virginia, issued 68 fraudulent checks from Allstate accounts totaling $862,871.29 while he worked as a claims adjuster in 2018 and 2019. Massey had authorization to issue settlement checks for up to $100,000 in his position with Allstate, according to documents filed with the court.
Federal prosecutors say Massey issued checks to American Mitigation Services, also known as AMS Cleaning, for mitigation work that was never done. Massey told an Allstate fraud investigator that he had no financial interest in AMS Cleaning but later admitted that he was an authorized signer for checks written on the business’ bank accounts.
Massey tried to cover up his crimes by creating fraudulent receipts and documents that appeared to justify the payments. He also created a fictitious $1 million contract purporting to show that AMS had been sold to a non-existent company before he issued any of the checks.
According to prosecutors, Massey used the money he stole from Allstate to pay employees and buy inventory for a business he operated, Massey Powersports LLC. The company sells all-terrain vehicles, tractors and motorcycles at two locations, one in Cross Lanes and the other in Beckley, West Virginia, according to the company’s website.
Massey pleaded guilty to one count of wire fraud and one count of money laundering in an agreement with prosecutors. Federal sentencing guidelines called for a prison sentence of 51 to 63 months.
The US Attorney’s Office for the Southern District of West Virginia seized a two-bedroom house he owned in Surfside Beach, South Carolina, which has a current value of $496,000, according to Zillow.com. He also agreed to hand over the title to his 2019 Ford pickup. Federal prosecutors agreed to allow him to retain ownership of his business as long as he pays restitution.
US District Judge Frank W. Volk sentenced Massey on Thursday.
Top photo: Prosecutors say Massey used part of the proceeds of his insurance fraud scheme to buy inventory for his business, Massey Power Sports. All-terrain vehicles sold at the company’s showroom in Beckley, West Virginia are shown.
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