A Houston attorney and two former employees of The Hartford have been indicted for a conspiracy in which the lawyer allegedly paid millions in bribes to the insurer's employees to obtain favorable settlements for his clients with silicosis claims.
Accused in a 14-count federal indictment in Houston that included charges of conspiracy, mail and wire fraud, and the laundering of millions of dollars were John Prestage and Rachel Rossow, who formerly worked at The Hartford, and attorney Warren Todd Hoeffner.
Mr. Prestage and Ms. Rossow were arrested in Connecticut yesterday, according to the U.S. Attorney's Office of the Southern District of Texas in Houston.
The indictment charges that between February 2002 and November 2004, Mr. Hoeffner bribed the two Hartford employees to recommend that the company settle silicosis injury claims by Mr. Hoeffner's clients against the company and its insureds.
Silicosis is a form of occupational lung disease caused by inhalation of crystalline silica dust.
According to the grand jury, Ms. Rossow and Mr. Prestage agreed to pay Mr. Hoeffner more than $34 million to settle his claims.
The two former Hartford employees, in return, received more than $3 million and each a new BMW automobile as part of the conspiracy from Mr. Hoeffner, the indictment charged.
The indictment was unsealed yesterday after the arrest of the three defendants, according to the U.S. Attorney Office.
Mr. Hoeffner was released on a $250,000 bond after appearing before U.S. Magistrate Frances Stacy, who set a Sept. 4 trial date.
Mr. Prestage was ordered released on a $250,000 personal recognizance bond, while Ms. Rossow's bond is still not established, according to the U.S. attorney office.
Mr. Prestage and Ms. Rossow will be arraigned on the indictment in Houston soon, the U.S. Attorney's Office said.
The wire fraud and mail fraud charges carry a maximum penalty of five years in prison and conviction on the charge of conspiracy to commit money laundering carries up to 20 years in prison.
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