Kimberly Graziano, a former insurance broker on Long Island who previously pleaded guilty to charges of grand larceny, scheme to defraud and other crimes has been sentenced to three to nine years in prison.
The court also ordered Graziano to pay a total of $1.8 million in restitution to her victims.
Graziano owned and operated K.A.G. Insurance Brokerage, Inc., in Islandia, New York.
Several different schemes
According to prosecutors, Graziano and K.A.G. Insurance engaged in several distinct schemes to defraud a financing company, her clients, and several insurance carriers including National General Insurance, Progressive Insurance Company, MetLife, Tudor, AIG, and Golden Insurance Company.
Suffolk County District Attorney Thomas Spota said in a statement that Graziano had “falsified contracts by inducing a financing company, Alliance Premium Funding Corp. of Floral Park, to financially back policies that purported to be for her agency’s corporate customers. The investigation found the defendant never actually purchased insurance coverage for her clients. Consequently, Graziano and her firm were indicted in March of last year for the theft of more than $1 million in falsely financed insurance coverage.”
Prosecutors said that there was evidence of nearly 30 forged financing contracts totaling in excess of $1 million of stolen funds from Alliance Premium Funding.
'She left a real mess in her wake'
In a related scheme, Graziano collected premium payments and falsified insurance cards and false certificates of liability insurance coverage to convince her customers that they had insurance coverage in place when, in fact, they did not have any insurance, according to prosecutors.
“Her schemes began to unravel when her clients’ vehicle registrations were suspended by DMV for lapses in insurance coverage, and claims made on commercial insurance policies were being denied by the insurance carriers for lack of a policy. She left a real mess in her wake,” District Attorney Spota said.
In 2015, K.A.G. Insurance’s license to operate as an insurance broker expired and no renewal application was filed. Despite this, Graziano and K.A.G. Insurance “continued to operate and extend several illegal schemes that ultimately victimized several dozen firms,” District Attorney Spota added. Cement truck operators, towing companies, and snow removal businesses were among the victims scammed by Graziano.
Lost business, fines for commercial clients
Many of Graziano’s commercial clients lost business and had to deal with DMV fines as well as tens of thousands of dollars in fines assessed for operating without valid workers’ compensation coverage, according to the district attorney.
Graziano and K.A.G. Insurance pleaded guilty to nine charges of grand larceny, scheme to defraud in the first degree, three counts of criminal possession of a forged instrument in the second degree, insurance fraud in the fifth degree, and a violation of state insurance law.
Steven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at email@example.com.