For Immediate Release
May 9, 2011
Catherine L. Bernhard Senior Assistant Attorney General
Insurance Fraud Unit Prosecutor
Consumer Protection and Anti Trust Bureau
(603) 271-2898 or (603) 271-7973 x 235
Attorney General Michael A. Delaney and Insurance Commissioner Roger A. Sevigny announced today the conviction of Josephine a/k/a "Jodi" Rich of Lyme Center, NH for the insurance related crime of Theft by Misapplication of Property. Ms. Rich worked until January of 2011 for the Everett B. Rich Agency and was an agent for Harleysville Worcester Insurance Company, ("Harleysville") in 2008. Ms. Rich was charged with theft by misapplication of property after she obtained payment for a full year's insurance premium in the amount of $31,224 and forwarded only approximately $9,266 to Harleysville. Ms. Rich used the remaining approximate $21,900 as her own. Ms. Rich was under an obligation as a licensed New Hampshire insurance producer to forward the full amount of the premium to Harleysville.
On May 9, 2011, a hearing was held at the Grafton County Superior Court at which Ms. Rich pleaded guilty to one Class A felony of theft by misapplication of property for receiving payment of one full year's insurance premium from Mr. Green and Green Woodlands and recklessly failing to make the required payment to Harleysville of the full premium amount of $31,224. Ms. Rich was sentenced as a result of a negotiated plea bargain. As part of her sentence, Ms. Rich received a sentence of one and one half to three years at the New Hampshire State Prison for Women. She was also required to pay a fine of $4,000. All of the prison sentence and two thousand dollars of the fine were suspended for a period of five years. Ms. Rich's New Hampshire license to practice as an insurance producer was revoked as part of a Consent Order and Settlement Agreement issued by the NH Insurance Department on December 13, 2010.
The matter was investigated by the NH Insurance Department Fraud Unit in response to a consumer complaint filed by Mr. Robert Green of Green Woodlands. The investigation revealed that in July of 2008, Mr. Green gave his insurance agent, Josephine Rich, a check in the amount of $31,224 which was payable to Harleysville and Rich Insurance as payment for one year's insurance premium for his property. As a licensed insurance producer, Ms. Rich was required by RSA 402-J and the NH Insurance Department Administrative Rule ("Ins.") 4301 to deposit the premium into a premium trust account and to forward all of the premium paid in full. Ms. Rich failed to pay the premium in full to Harleysville, and as a result on November 19, 2008, the Green Woodlands' polices cancelled for nonpayment. When Mr. Green questioned Ms. Rich about the cancellation of the insurance policies, Ms. Rich was not immediately candid with him. She alleged that Harleysville had poor bookkeeping policies and in order to appease Mr. Green, she pretended to schedule a meeting and a telephone conference for Mr. Green with the insurance company's president and vice president. When the meeting and phone conference did not occur, Mr. Green contacted the vice president of the insurance company directly. He was informed that no meetings had ever been scheduled by Ms. Rich and that her excuses to Mr. Green as to why the meetings had not taken place were untrue. Confronted with this information, Ms. Rich admitted to Mr. Green that she had not forwarded the full amount of the premium payment to Harleysville. She told Mr. Green that she knew her actions were "unconscionable."
As part of the NH Insurance Department Fraud Unit investigation, Ms. Rich was interviewed. Ms. Rich told the Fraud Unit investigator that she knew the laws regulating New Hampshire insurance producers. She said that she deposited Mr. Green's premium money into the agency premium trust account and instead of forwarding the money in full to Harleysville, she withdrew the money to help fund cost overruns that were incurred during the renovation of the insurance agency building. The investigation revealed that on July 21, 2008, $31,224.00 was deposited into the Everett B. Rich Insurance Agency Premium Trust Account, but that only $9,293.75 of the premium was forwarded to Harleysville between July and September of 2008. At some point in time after she was confronted by Mr. Green, Ms. Rich paid the remaining premium owed to Harleysville and Mr. Green's polices were eventually reinstated by Harleysville without an interruption in coverage.
The prosecution is the result of collaboration between the Attorney General's Office and the NH Insurance Department Fraud Unit. The Fraud Unit was formed under RSA 417 to investigate and prosecute Insurance Fraud and other insurance-related criminal activity with the assistance of the NH Department of Justice.
New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301