LANSING, Mich., June 18 -- The Michigan Attorney General issued the following news release:
Michigan Attorney General Bill Schuette and OFIR Commissioner Kevin Clinton today announced the Attorney General's Corporate Oversight Division has charged a Texas man for his alleged involvement in a fake insurance scam, which operated under the name Ethos Insurance. The charges result from a joint investigation by the Office of Financial and Insurance Regulation (OFIR) and the Department of Attorney General.
"Auto insurance fraud affects every driver in our state by raising costs when citizens can least afford it," said Schuette. "Scam artists who fleece responsible drivers will face justice."
"The Attorney General's office and OFIR will continue to work closely to bring insurance scam artists to justice," OFIR Commissioner Kevin Clinton said. "Consumers are encouraged to call us at 877-999-6442 to check if an auto insurance agent or agency is licensed to do business in Michigan."
Texas resident Don Diamond, 48, owned and operated Ethos Insurance Agency, a Texas corporation. In December 2010, Diamond was licensed by the State of Michigan to sell automobile insurance. It is alleged that between January and June 2011, Diamond opened at least four Ethos Insurance offices in the Southeast Michigan area. Alleged Detroit locations include: 16600 Plymouth Ave., 8340 West Vernon Hwy, 15291 Gratiot, and 11000 West McNichols Rd.
According to the charges, Diamond allegedly hired, trained, and managed at least twelve unlicensed agents at those offices to sell auto insurance. Between January and June 2011, Michigan Ethos employees sold more than 2,200 bogus auto insurance policies under various names, including: Dairyland, Auto Owners, Nationwide, Farmers, Farm Bureau, and Progressive.
Schuette alleges that while the total premiums for the actual policies amounted to over $2 million, the total money paid by victims into the scam was $492,316, given that most victims paid only the initial amount needed to obtain the bogus policies. Of that, it is alleged that Diamond pocketed, after covering the costs of the bogus operation, at least $123,204 from between March 2, 2011 and June 30, 2011.
The following charges have been filed by Schuette with the 36th District Court in Detroit:
* Donald Michael Diamond:
One count of False Pretenses ? $20,000 or More, a felony punishable by up to 10 years in prison and/or a $15,000 fine or 3 times the amount of money involved, whichever is greater; and
Two Counts of False Pretenses - $1,000 or More But Less Than $20,000, a felony punishable by up to 5 years in prison and/or a $10,000 fine or 3 times the amount of money involved, whichever is greater.
* Ethos Mutual Insurance Group, LLC:
Diamond surrendered to authorities at the Wayne County jail this morning for processing. It is expected that he will be arraigned on the charges at 1:00 PM today in Detroit's36th District Court.
Schuette asks any citizens who believe they may be a victim of the alleged Ethos Automobile Insurance scam to file a complaint with the Attorney General's Consumer Protection Division at www.michigan.gov/AG.
A criminal charge is merely an accusation and the defendant is presumed innocent unless proven guilty.
TNS JB47120619 gv-3914726 61GemaViana