Insurance Agency Owner Convicted of Stealing More Than $1.7 Million in Fraud Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that a federal jury in Hartford today found EARL O’GARRO, JR., 32, formerly of Marlborough, guilty of defrauding a specialty lender, insurance carriers and the State of Connecticut. The trial before U.S. District Judge Alvin W. Thompson began on December 8 and, after deliberating for approximately one hour, the jury returned verdicts of guilty on all three counts.
“The defendant took advantage of friends and associates in the insurance industry to support a lifestyle he couldn’t afford,” said U.S. Attorney Daly. “I thank the FBI and our trial team for their expert investigation and prosecution of this matter, which led to a swift verdict of guilty.”
“Today, victims of fraud have been given some degree of closure by the jury’s decision,” said FBI Special Agent in Charge Ferrick. “The FBI and our law enforcement partners intend to continue to pursue these types of violations to the fullest extent of the law.”
According to the evidence at trial, O’GARRO was the President, Chief Executive Officer and an owner of Hartford-based Hybrid Insurance Agency, LLC (“Hybrid”), a wholesale insurance brokerage specializing in placing excess and surplus line insurance products.
Beginning in approximately April 2013, O’GARRO defrauded Capital Premium Financing, Inc., a specialty lender that provides premium financing on behalf of insured entities. O’GARRO falsely represented to Capital Premium Financing that an insurance carrier, AmTrust E&S Insurance Services, Inc. (“AmTrust”), had issued insurance policies for four companies, that these companies were using Capital Premium Financing’s services to finance their premium payments, and that Hybrid had brokered the contracts and was entitled to collect the premiums on behalf of AmTrust. In fact, O’GARRO knew that AmTrust had not issued policies for any of these four companies. Relying on O’GARRO’s misrepresentations, Capital Premium Financing subsequently released $849,282.55 in premium payments to Hybrid on the purported insurance policies. O’GARRO converted the funds to his own use. In July 2013, as part of an effort to prolong the scheme, O’GARRO created an e-mail address and Internet domain name similar to that of AmTrust in order to assume a false identity as an AmTrust underwriter. Posing as an AmTrust underwriter, O’GARRO sent an e-mail to Capital Premium Financing to falsely verify the existence of the four policies.
Hybrid also served as the wholesale broker for certain insurance policies held by the City of Hartford. In July 2013, O’GARRO directed the city to transfer $868,244 in premiums to Hybrid. After the City of Hartford wired Hybrid the funds, O’GARRO intentionally withheld $669,997 in premium payments from the appropriate excess insurance carries, Starr Indemnity & Liability Company, Inc. and National Casualty Company. Instead, O’GARRO converted the money to his own use. In fact, approximately 17 minutes after receiving the funds, O’GARRO wired $300,000 to Capitol Premium Financing as partial repayment for the monies he had been caught stealing from them. O’GARRO then falsely advised the city that the premium payments had been remitted to the insurers.
The evidence at trial also established that, in approximately July 2013, O’GARRO, on behalf of Hybrid, submitted a false application to the State of Connecticut Department of Economic and Community Development (“DECD”) for a $500,000 loan. In his application, O’GARRO provided false information concerning his and Hybrid’s financial condition. Based in part on these false statements, DECD approved Hybrid’s loan application and mailed a $250,000 check to Hybrid. O’GARRO used a substantial portion of these loan funds to make a payment on a million dollar condominium he had purchased in the Dominican Republic and to pay tuition at his children’s private school.
The jury found O’GARRO guilty of two counts of wire fraud and one count of mail fraud. Each charge carries a maximum term of imprisonment of 20 years. Judge Thompson scheduled sentencing for March 7, 2016.
O’GARRO has been released on a $500,000 bond since his arrest on November 21, 2014. He will now be subject to electronic monitoring while awaiting sentencing.
This matter is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Avi M. Perry and Michael J. Gustafson.