Seven Indicted for Fraud in Travis County, Texas

The Travis County (Texas) District Attorney’s Office announced that a Travis County Grand Jury returned indictments charging seven people with the felony offense of unauthorized insurance. The Insurance Fraud Section of the District Attorney’s Public Integrity Unit is prosecuting the cases involving the alleged insurance fraud.

The indictments accuse the seven individuals of selling bogus insurance products to Texas consumers in need of affordable health insurance. Those indicted are: Michael DeBello, possibly of Pennsylvania; Chris Ashiotes of New Jersey; Michael Divece of New Jersey; James Doyle of New Jersey; Donald Smith of Plano, Texas; Rhonda Porter of Plano, Texas; and Scott Rutherford of Houston, Texas.

The DA’s office said many consumers across Texas paid premiums to sham companies operated by these defendants and then found themselves uninsured after discovering that they had purchased worthless, non-existent insurance policies.

“Innocent Texans were defrauded by the lies of these defendants. They betrayed the trust that is the foundation of the insurance industry. It is the mission of the Public Integrity Unit to hold accountable those who would betray the trust of the public,” said District Attorney Ronald Earle.

According to the DA’s office the defendants utilized sham insurance companies and unions and associations operating in Texas to market the bogus products.

The indictments allege that the defendants used the following company and association names: Employers Mutual LLC; American Benefit Society; Privilege Care Inc.; Privilege Care Management Group; Professional Industrial Trade Workers Union, or PITWU; International Union Industrial and Independent Workers, or IUIIW; International Union of Petroleum and Industrial Workers, orIUPIW; and International Union of Public and Industrial Workers, or IUPIW.

The indictments are the result of a joint investigation by the Travis County District Attorney’s Public Integrity Unit and the Texas Department of Insurance Fraud Division.

Unauthorized insurance is a third degree felony punishable by two to ten years in prison and a fine of up to $10,000.