Insurance agents plead guilty to selling fake certificates
A pair of insurance agents sold fake proof-of-coverage certificates statewide for years until their scheme was “uncovered and disrupted” by undercover operations by two federal agencies.
Allen Chadderdon and Dean Tucker of Lansing pleaded guilty for their roles in creating and selling fake insurance certificates to owners and users of underground storage tanks, or USTs, primarily at gas stations, the U.S. Attorney's Office in Grand Rapids said this week.
The tanks were uninsurable, mostly due to age.
The certificates made it appear the tanks were in compliance with federal and state laws requiring owners and operators of the tanks to demonstrate the ability to clean up any environmental contamination caused by a leaking tank.
Chadderdon and Tucker sold the documents from 2011 to 2013. The fake documents made it seem to federal and state inspectors the gas stations could pay for cleanups, when in reality they had no insurance.
Most operators purchase insurance that would cover up to $1 million in clean-up costs and damages.
More than 30 different cities, including Battle Creek, Lansing, Ann Arbor and Detroit, were “exposed to risk of leaking underground storage tanks, where no insurance was available to pay for clean-up costs or injuries,” U.S. Attorney Patrick Miles, Jr. said.
“This fraud scheme presented serious risk of harm to many communities across Michigan,” Miles said. “Fuel and oil that leaks from underground storage tanks threatens not only the land surrounding the tank, but can harm drinking water and our state’s rivers and lakes.
“This investigation and criminal case helps ensure that owners and operators of USTs comply with the law, and those who knowingly help others evade the law will be brought to justice.”
The scheme was discovered through a joint effort by the Environmental Protection Agency and the Federal Bureau of Investigation.
Gas stations that were discovered to not hold true insurance policies during the EPA and FBI undercover operation were shut down until the operator was able to comply with the law.
The pair pleaded guilty in federal court to fabricating insurance certificates, a federal offense, with both men facing up to 20 years in prison. Chadderon will be sentenced on Dec. 3, and Tucker will be sentenced on March 5, 2015.
“These recent pleas demonstrate that insurance agents who callously place the American people at risk by falsifying official certificates will be held accountable for their actions,” said Randall Ashe, special agent in charge of Michigan criminal enforcement, EPA.
The cases are being prosecuted by Assistant U.S. Attorney Christopher O’Connor.
“The FBI, along with our federal, state and local partners, remains vigilant in its efforts to bring to justice those who actively assist others in evading the law and expose our communities to potential harm,” said Paul Abbate, special agent in charge, FBI Detroit Field Office.