Michigan Insurance Agent Convicted Of Racketeering
An insurance broker from Troy was sentenced to serve 14 months to 20 years in prison following his conviction for racketeering.
Oakland County Circuit Court Judge Daniel O'Brien ordered John Flaherty, 70, to pay back $1.3 million in restitution at his sentencing Nov. 16.
According to the State Attorney General's Office, the charges were filed after it was discovered that Flaherty was allegedly pocketing insurance premiums paid by local insurance agents on behalf of their customers - premiums intended for the insurance companies - using his insurance brokerage firm, Alternative Insurance Services Inc.
According to a statement from the Attorney General's Office, the investigation revealed that Flaherty, starting in 1999, would take small sums of insurance premium money from agents and spend it on himself rather than forwarding it to the insurance companies to which the money was owed. Flaherty used the money to pay for expensive cars, clothing and even to live in a hotel for over a year while he was using additional premiums to pay the mortgage on a home he owned.
According to the statement, the investigation revealed that Flaherty covered the fraud for years by taking money from other premiums to cover the money he stole. However, once his business slowed, he was unable to continue covering the $1.3 million fraud.
"Local insurance agents trusted that this man was doing legitimate business when in fact he was taking advantage of them and their customers in order to benefit himself," Attorney General Bill Schuette said in the statement. "This violation of trust is against the law and will not be tolerated."
Flaherty's attorney, Ronald Weitzman, could not be reached for comment at press time.
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About the author
Staff Writer Terry Oparka covers Troy and the Troy School District for the Troy Times. Oparka has worked for C & G Newspapers since 2000 and attended Oakland University and Macomb Community College. Oparka has won an award from the Michigan Press Association and three awards from the Society of Professional Journalists, Detroit Chapter.
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