Edward J. Chadwick, of Yakima, Wash., pleaded guilty to first-degree theft in Spokane County Superior Court involving 24 insurance premium finance loans.
Chadwick was ordered by the court to report to the Spokane County Jail by Oct. 1 to serve 30 days of confinement. He must also pay $600 in court fees and $847,795 in restitution to a Spokane premium finance company.
Charges against Chadwick were brought after an investigation by Insurance Commissioner Mike Kreidler’s Criminal Investigations Unit (CIU).
Chadwick was an insurance producer and owned an insurance agency called Kelt, primarily selling insurance to transportation companies. He is accused of fraudulently obtaining 24 insurance premium finance loans totaling $2.8 million from April 2016 through July 2018 from Tepco, a premium finance company based in Spokane.
He is accused of obtaining loans on behalf of several fake trucking companies for commercial policies that didn’t exist. He also obtained loans on behalf of one real trucking company, a former client, without the client’s knowledge.
An insurance premium finance loan helps businesses pay for property and casualty insurance in installments rather than paying an entire year’s premium in full. The premium finance company pays the full annual premium to the insurance company and the policyholder makes payments, including interest, to the premium finance company. The insurance producer helps the policyholder find the loan.
Tepco notified Kreidler’s office of the activity in December 2018. Chadwick repaid $1.9 million plus interest to Tepco. The balance of the loans is $898,662, not including interest and fees.
Kreidler revoked Chadwick’s insurance producer license in February 2019. Chadwick challenged the revocation, but Kreidler’s office prevailed and his license was officially revoked in September 2019.
Kreidler’s CIU investigates insurance fraud and works with the Washington State Patrol and state and local prosecutors on criminal cases. Insurance fraud costs the average family $400 to $700 per year in increased premiums. Insurance companies are required by law to report fraud to the commissioner.