In a significant development within the world of insurance fraud, Manhattan District Attorney Alvin Bragg, Jr. has announced the indictment of a $250 million off-shore insurance scheme. The scheme involved INTER-INSURANCE AGENCY SERVICES LTD. and its top executives. The indictment targets the company's 60-year-old chairman and owner, Timothy "Tim" Barry Derham, along with his nephew, 32-year-old Chief Technology Officer Donald "Trip" A. Derham III, accused of issuing more than 40 unauthorized policies that boasted coverage of more than $250 million while having less than $600,000 in equity, according to the Manhattan District Attorney's office.
As outlined by the indictment, over the span of eight years starting in March 2014, the accused ran a lucrative operation from their Barbados-based company, International Underwriting Insurance Company, which, despite not being authorized to do business in New York State, provided fraudulent policies to diverse clients including construction firms and homeowners. In detail, the indictment accused the Derhams of various counts of grand larceny, scheme to defraud and offering a false instrument for filing.
"New Yorkers trust that when they purchase insurance, whether to safeguard their home or operate on an airport tarmac, they are paying for protection in times of crisis. As alleged, these defendants flagrantly lied and issued worthless insurance policies from their off-shore company while pocketing thousands in premiums and fees," declared District Attorney Bragg. Port Authority Inspector General John Gay, reinforcing the severity of the allegations, commented on the immediate action taken once the fraudulent scheme was brought to light, appreciating the collective endeavor to protect the integrity of public projects, as detailed by the Manhattan District Attorney's office.
The accusation suggests a blatant disregard for legal procedure, as the policies issued were for amounts far exceeding the company's net worth of $600,000, with coverage ranging from $1 million to $25 million per policy. Tim Derham was cited as the primary decision-maker for which policies were issued and at what cost, while Trip Derham is alleged to have assisted with the operational and management decisions, creating documents which contained falsehoods despite being aware of their inaccuracies.
The discovery of the fraudulent operation came to light after INTER-INSURANCE failed to produce necessary documentation when a third-party verification was required for a contract on Port Authority of New York and New Jersey property. Assistant D.A. Jaime Hickey-Mendoza is leading the prosecution under the oversight of significant figures within the District Attorney's Rackets Bureau. Alongside, the prosecutorial team extends their gratitude to the Port Authority's Inspector General's Office and other regulatory bodies for their pivotal roles in the investigation's advancement.
