Posted on 04 Jun 2009
Former Wisconsin insurance executive Douglas Nickerson and a business associate were indicted Wednesday on charges of carrying out what prosecutors called a years-long scam to defraud a major insurer of more than $800,000.
An indictment returned in U.S. District Court in Madison alleges that Mr. Nickerson, the former property program manager of General Casualty Insurance, used his position to carry out the scheme between 2003 and 2008.
Nickerson concealed fraudulent payments in otherwise large, legitimate insurance claim files so they would not attract attention at General Casualty, a regional insurer headquartered in Sun Prairie. Nickerson hand-delivered the checks to three individuals, who were directed to keep a portion of the money and give him the rest, the indictment said.
Nickerson received about $564,000 of the proceeds while the other three individuals received another $259,000, according to the indictment.
One of them, Oregon, Wis. general contractor David Janssen who did business as Heartland Associates, was charged in the indictment with aiding and abetting the scheme. Prosecutors said Janssen kept $34,000 of the money.
The indictment identified the other two conspirators only as "Individual A and Individual B." U.S. Attorney Erik Peterson said the investigation regarding those individuals is continuing.
Nickerson, 44, declined to comment when reached by phone. He referred calls to his attorney Steven Kohn, who said he had not seen the indictment and could not comment on the allegations.
"I can tell you that Mr. Nickerson has been cooperative with the authorities throughout their investigation and we are looking to resolve this in as amicable a manner as possible," Kohn said.
Jennifer Vernon, general counsel for QBE Regional, General Casualty's parent company, said a routine company audit last year turned up discrepancies in vendor payments authorized by Nickerson. She said the company asked the FBI to investigate.
Nickerson, who had been with the company since 1993, left the company after the discovery, she said.
"Through our own internal investigation, we've confirmed that neither our agents nor policyholders were harmed by the situation and we believe this was an isolated incident," Vernon said.
General Casualty provides auto, home and business insurance products through more than 1,300 agents in 25 states. It has about 1,700 U.S. employees.
In his job, Nickerson handled many of the largest property claims, recommended vendors to work on pending claims, and recommended and approved loss and expense payments. He had the authority to write checks up to $500,000.
Nickerson is charged with misappropriating the company's money. Both he and Janssen, 47, face up to 10 years in prison.