Seven charged in life insurance scheme

Tuesday, August 14, 2012 - 10:30am

Seven area residents have been charged for their role in a life insurance fraud scheme.

The U.S. Attorney has charged Timothy Schlatre, 34, of Denham Springs, with mail fraud, money laundering, and asset forfeiture. Schlatre faces a maximum sentence of 30 years in prison and fines of up to $500,000 or twice the gross gain or loss from the offense, whichever is larger.

The U.S. Attorney has also charged Jason Paul Austin, 32, Jodi Marie Austin, 34, Ricky Austin, 49, Jimmy O Cassels, 33, Todd D. Cummings, 34, and Dena A. Gaudet, 33, each with Conspiracy to Commit Mail Fraud. These individuals each face a maximum sentence of 5 years in prison and a fine of up to $250,000.

The Bills of Information allege that Schlatre, using his position as a life insurance agent for New York Life and Lincoln Financial, devised a scheme to defraud New York Life and Lincoln Financial in order to fraudulently receive commission payments by selling life insurance policies based on false statements and representations. Specifically, Schaltre submitted false information to the companies regarding the applicant’s net worth and annual income,
thereby defrauding New York Life and Lincoln Financial into approving the policies and issuing the commission payments to Schlatre to which he was not entitled. Because the policy values were so large, the applicants could not afford to make the premium payments.

In order to effectuate his scheme, Schaltre further agreed to provide the premium payments on behalf of the applicants. This process, known as “rebating,” was prohibited by both company’s policies as well as state law. In order to conceal the fact that he was the source of the premiums, Schlatre deposited money directly into the individual applicant’s bank account.

Schlatre further misrepresented the source of the premium payments by falsely declaring that he was not paying or allowing the rebating of any premiums. 

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