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Full Indictment Information of Insurance Commissioner Jim Beck

Georgia Insurance Commissioner, Jim Beck of Carrollton has been indicted with 38 counts of wire fraud, mail fraud and money laundering in the Northern District of Georgia Atlanta Division.

Beck was elected as Insurance Commissioner in November of 2018.

We will bring you more updates during tomorrow’s morning newscast.

Below is a copy of the indictment from the US attorneys office

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

UNITED STATES OF AMERICA

V.

JIM C. BECK

 

THE GRAND JURY CHARGES THAT:

 

Counts 1 through 12

(Wire Fraud)

 

  1. Beginning in or about February 2013 through in or about June 2018, in

the Northern District of Georgia and elsewhere, the defendant,

Jim C. Beck

did knowingly devise and intend to devise a scheme and artifice to defraud the

Georgia Underwriting Association, and to obtain money and property from that

entity by means of a materially false and fraudulent pretense, representation, and

promise, as well as by an omission of material facts, well knowing and having

reason to know that said pretense, representation, and promise was and would

be false and fraudulent when made and caused to be made and that said

omission was and would be material.

 

Background

At all times relevant to this Indictment:

  1. BECK was the elected General Manager of Operations for Georgia

Underwriting Association (GUA), an insurance association, located in Suwanee,

 

Georgia, in the Northern District of Georgia. As General Manager of Operations,

BECK owed a fiduciary duty to GUA.

  1. GUA was created under the Georgia Fair Access to Insurance

Requirements (FAIR) law to provide high-risk property insurance to

homeowners located throughout Georgia.

  1. GUA was governed by a board of directors appointed by the Georgia

Commissioner of Insurance, along with other members elected from a slate of

candidates selected by the Georgia Co1!lffiissioner of Insurance.

  1. In addition to premiums collected from its customers, GUA was also

funded by issuing assessments to the association members, which included every

insurer authorized to write any form or type of property insurance in the State of

Georgia.

  1. BECK had a controlling financial interest in a business entity known as

Creative Consultants located in Carrollton, Georgia:

  1. BECK had a controlling financial interest in a business entity known as .

GA Christian Coalition located in Carrollton, Georgia.

  1. Company A was a business entity formed at the suggestion and

. encouragement of BECK by M.B., a friend and associate of BECK. Company A

was formed in 2013 and located in Temple, Georgia from 2013 to 2016 and

incorporated in 2016 and located in Fort Myers, Florida from 2016 to 2018.

Company A, which had no employees, existed only to produce fraudulent

invoices, collect payment for fraudulent invoices, and redirect payments that it

received to BECK through Creative Consultants.

 

  1. Company B was a limited liability corporation formed at the suggestion
  • and encouragement of BECK by S.J.M., a friend and associate of BECK.

Company B was formed, incorporated, and located in Raleigh, North Carolina.

  1. Company C was a limited liability corporation formed at the suggestion

and encouragement of BECK by S.W.M., a friend and associate of BECK.

Company C was formed and located in Raleigh, North Carolina and

incorporated in Georgia.

  1. Company D was a limited liability corporation formed at the

suggestion and encouragement of BECK by S.G., a friend and associate of BECK.

Company D was formed, incorporated, and located in Bowdon, Georgia.

Company D, which had no employees, existed only to produce fraudulent

invoices, collect payment for fraudulent invoices, and redirect payments received

to BECK through GA Christian Coalition.

 

The Scheme and Artifice to Defraud

 

The Company A, Company B, and Company C Scheme

  1. In early 2013, BECK told M.B. that he had developed a riew, more

economical way to do home inspections, which would save insurance companies

a lot of money. BECK asked M.B. if he was interested in forming a business

entity and handling “the books” for the new business in exchange for a 10% cut

of the proceeds. After BECK assured M.B. that his proposal was “on the up and

up,” M.B. accepted BECK’s offer and, in response, formed Company A. M.B.

incorrectly believed that other unidentified individuals were performing the

home inspections on behalf of Company A.

  1. In 2015, BECK told S.J.M. that he had a business project for her.

According to BECK, he wanted S.J.M to review property inspection reports for

 

GU A in order to determine whether the premiums GU A charged its customers

should be adjusted based on the condition of the properties. BECK also

requested that S.J.M. bill for Company A services on the invoices that she would

prepare and submit to GUA. Based on information S.J.M. received from BECK,

S.J.M. incorrectly believed that Company A was responsible for procuring the

thousands of property inspection reports that she would be r;eviewing. BECK

told S.J.M that she could keep 10% of the amount that she billed GUA each

month for Company A’s services. S.J.M. accepted BECK’ s offer and, in response,

formed Company B. S.J.M. d/b/a Company B began to review property

inspection reports and to bill GU A for her own services and the work she

believed was performed or procured by Company A. In total, S.J.M. d/b/ a

Company B ‘invoiced and collected approximately $908,000 from GUA and paid

approximately $713,000 to M.B. d/b/ a Company A. Then, at BECK’s direction,

Company A paid 90% of the funds it received from Company B to BECK through

Creative Consultants. ·

  1. In 2016, BECK contacted S.W.M. about a new business idea. BECK told

S.W.M that he wanted him to assist GUA with offering mitigation advice to GUA

customers who had potential water damage claims. BECK told S.W.M. that GUA

would pay him a monthly retainer fee for his work. S.W.M. accepted BECK’ s

offer and, in response, formed Company C. S.W.M. d/b / a Company C began to

offer water damage mitigation counseling to GUA customers. BECK then

instructed S.W.M. to include billing for Company A services on the Company C

inv~ices that S.W.M. prepared for GUA. Based on information from BECK,

S.W.M. incorrectly believed that Company A was responsible for reinsuring

GUA for its water damage coverage. In total, S.W.M. d/b/ a Company C

invoiced and collected approximately $370,000 from GUA and paid

approximately $325,000 to M.B. d/b/a Company A.

  1. Between February 22, 2013 and May 30, 2018, at BECK’ s direction, M.B.

prepared monthly Company A invoices that falsely and fraudulently stated that

Company A had produced” online home inspections” and” data scans” for GUA.

On approximately 47 occasions, these invoices were sent directly to BECK in an

electronic format to his personal email address. With BECK’s approval, GUA

paid the Company A invoices.

  1. Between January 8, 2016 and March 15, 20181 at BECK’ s direction, M.B.

prepared monthly Company A invoices that falsely and fraudulently stated that

Company A had produced “inspection/ data packets” for Company B. On

approximately 29 occasions, these invoices were sent directly to BECK in an

electronic format to his personal email address. BECK then sent the same

invoices directly to S.J.M d/b/a Company Bin an electronic format. In turn, at

BECK’s direction, S.J.M. prepared Company B invoices for GUA that included

the same purported Company A services but at a marked-up rate. With BECK’ s

approval, GUA paid the Company B invoices and, at BECK’s direction, S.J.M

paid the corresponding Company A invoices.

  1. Between November 7, 2016 and June 15, 2018, at BECK’ s direction,

M.B. prepared bi-monthly Company A invoices that falsely and fraudulently

stated that Company A had produced “24/7 Mitigation Service Bronze Package”

for Company C. On approximately 10 occasions, these invoices were sent

directly to BECK in an electronic format to his personal email address. BECK

then sent the same invoices directly to S.W.M d/b/ a Company C in an electronic

format. In turn, at BECK’s direction, S.W.M. prepared Company C invoices for

GUA that included the same purported Company A services. These Company C

invoices were sent by S.W.M. to BECK in an electronic format. With BECK’ s

approval, GUA paid the Company C invoices and, at BECK’s direction, S.W.M

paid the corresponding Company A invoices.

  1. Between February 15, 2013 and June 26, 2018, BECK sent invoices from

Creative Consultants to Company A that falsely and fraudulently stated that

Creative Consultants had produced “inspections,”” data scans,” and “Mitigation

Services-Water Package” for Company A. In each mstance, at BECK’s direction,

M.B. paid the Creative Consultants invoices with money Company A collected

by invoicing GUA, Company B, and Company C. Over the course of this scheme

and artifice, at BECK’ s direction, Company A paid BECK through Creative

Consultants approximately 90% of all the payments Company A received.

The Company D and GA Christian Coalition Scheme

 

  1. In late 2012, BECK approached S.G. with a business opportunity. BECK

told S.G. that he was interested in passing legitimate payments from GUA to GA

Christian Coalition in an effort to build up and improve GA Christian Coalition.

BECK told S.G. that the GUA board of directors gave BECK the authority to

make such an arrangement. BECK further explained that the GUA payments

should pass from GUA through another business entity that he suggested should

be formed by S.G. and be called Company D. In exchange for handling the flow

of payments from GUA to GA Christian Coalition, BECK told S:G. that he could

keep at least 10% of every payment that GUA made to Company D. S.G.

accepted BECK’ s offer and, in response, formed Company D.

  1. Between August 6, 2013 and October 7, 2016, BECK delivered GUA

checks to S.G. made payable to Company D. In no instance had S.G. invoiced

GUA for any work performed by Company D. However, BECK submitted

fraudulent Company D invoices to GUA. With BECK’s approval, GUA paid the

Company D invoices. , ~’

  1. In tum, on approximately 37 occasions, with each GUA payment

received by Company D, BECK delivered to S.G._ an invoice from GA Christian

Coalition for approximately 88% of the corresponding GUA payment to

Company D. The invoices from GA Christian Coalition falsely and fraudulently

stated that Company D was being billed for “advertising sponsorship” or

“sponsorship p~ckage.” In every instance, at BECK’s direction, S.G. paid GA

Christian Coalition invoices with money Company D had collected from GU A.

  1. All told, between February 2013 and August 2018, BECK, used the

above-described fraud schemes to embezzle in excess of $2,000,000 from GUA.

  1. BECK utilized the proceeds of the above-described fraud_ schemes for a

variety of purposes. These purposes included paying thousands of dollars of

personal expenses charged to a personal credit card and using thousands of

dollars to fund personal investment and retirement accounts, personal savings

accounts, and the “Jim Beck For Georgia, Inc.” statewide election campaign

account. BECK also utilized thousands of dollars of the illegal proceeds to

purchase and improve personal rental property and to pay his personal state and

federal income taxes.

  1. · Specifically, on or about the dates set forth in the following table, in the

Northern District of Georgia and elsewhere, the defendant,

 

JIM C. BECK,

 

for the purpose of executing the scheme and artifice described above, such

scheme and artifice knowingly having been devised and intended to be devised

to defraud, and for the purpose of obtaining money and property by means of a

materially false and fraudulent pretense, representation, and promise, as well as

by omission of a material fact, knowing and having reason to know that the

pretense, representation, promise, and omission was and would be material,

caused a wire communication to be transmitted in interstate commerce as a

result of the following transactions:

 

 

Counts 13 through 24

(Mail Fraud)

 

  1. · The Grand Jury re-alleges and incorporates by reference the factual

allegations from Paragraphs 1 through 23 of this Indictment as if fully set forth

here.

  1. On or about the dates set forth in the following table, in the

Northern District of Georgia and elsewhere, the defendant,

 

JIMC. BECK,

 

for the purpose of executing and attempting to execute the scheme and artifice

described above, and for the purpose of obtaining money and property by means

of a materially false and fraudulent pretense, representation, and promise, as

well as by an omission of material fact, knowing and having reason to know that

the pretense, representation, promise, and omission was and would be material,

did use the United States Postal Service by mailing and causing to be mailed and

did use a private and commercial carrier by depositing and causing to be

deposited with the carrier the items listed below:

All in violation of Title 18, United States Code, Section 1341.

 

  • Counts 25 through 38

(Money Laundering)

 

  1. The Grand Jury re-alleges and incorporates by reference the factual

allegations from Paragraphs 1 through 23 of this Indictment as if fully set forth

here.

  1. On or about the dates set forth in the following table, in the Northern

District of Georgia, the defendant,

 

JIMC. BECK,

 

did knowingly engage in monetary transactions affecting interstate commerce,

by and through a financial institution, as set forth below, each such transaction

involving criminally derived property of a value greater than $10,000, such

property having been derived from a specified unlawful activity, that is wire

fraud and mail fraud:

All in violation of Title 18, United States Code, Section 1957.

 

Forfeiture

 

  1. Upon conviction of one or more of the offenses alleged in Counts 1

through 24 of this Indictment, the defendant,

JIMC. BECK,

 

shall forfeit to the United States of America, pursuant to Title 18, United States

Code, Section 981(a)(l)(C) and Title 28, United States Code, Section 2461, any

property, real or personal, which constitutes or is derived from proceeds

traceable to such violations. The property to be forfeited includes, but is not

limited to, the following:

 

MONEY JUDGMENT: A sum of money in United States

currency, representing the amount of proceeds obtained as a

result of the offenses alleged in Counts 1 through 24 of this

Indictment.

  1. Upon conviction of one or more of the offenses alleged in Counts 25

through 38 of this Indictment, the defendant,

JIMC. BECK,

shall forfeit to the United States of America, pursuant to Title 18, United States

Code, Section 982(a)(1), any property, real or personal, involved in such offense,

or any property traceable to such property. The property to be forfeited

includes, but is not limited to, the following:

MONEY JUDGMENT: A sum of money in United States

currency, representing the amount of proceeds obtained as a

result of the offenses alleged in Counts 25 through 38 of this

Indictment.

If, any property subject to forfeiture, as a result of any act or omission of the

defendant:

(a) cannot be located upon the exercise of due diligence;

(b) has been transferred or sold to, or deposited with, a third party;

( c) has been placed beyond the jurisdiction of the court;

( d) has been substantially diminished in value; or

( e) has been commingled with other property which cannot be divided

without difficulty;

the United States of America shall be entitled to forfeiture of any other property

of the defendant up to the value of the forfeitable property, pursuant to Title 21,

United States Code, Section 853(p), as incorporated by Title 18, United States

Code, Section 982(b)(l) and Title 28, United States Code, Section 2461(c).

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