Prosecutors: Georgia Insurance Commissioner Ran $2M Scam

ATLANTA (AP) — Prosecutors want jurors to conclude that suspended Georgia Insurance Commissioner Jim Beck was running a $2 million scam to bilk money from the property insurer he led before being elected.

Defense attorneys say Beck was actually an innovative executive who led the Georgia Underwriting Association to strong profits and that prosecutors don’t understand Beck’s innovations.

That’s how lawyers on Tuesday kicked off what’s expected to be a two-week trial for Beck in federal court in Atlanta. The Republican was elected insurance and safety fire commissioner in 2018 and then indicted in May 2019, months after taking office. Beck is charged with mail fraud, wire fraud and money laundering.

Before he was elected, Beck was general manager of the Georgia Underwriting Association, an insurer of last resort that covers property owners unable to buy insurance on the regular market. Those regular insurers are co-owners of the GUA, sharing risk of any losses.

Assistant U.S. Attorney Sekret Sneed told jurors in her opening argument that Beck, a cousin and some friends created a series of shell companies that billed GUA for bogus services, with Beck ensuring invoices got paid even though some employees say they never saw any work product. Then the intermediaries sent money back to Creative Consultants or the Georgia Christian Coalition, both of which Beck controlled.

“What is Creative Consultants?” Sneed said. “It’s just a bank account controlled by the Becks.”

Sneed said investigators have concluded that business expenses Beck claimed also were faked.

“You will hear from the IRS that it is impossible that the defendant could have clamed the business expenses he did,” Sneed said.

Instead prosecutors allege Beck spent the money on himself, on investments, on taxes and his insurance commissioner campaign.

“Even the defendant had to keep a flowchart to keep it straight,” Sneed said.

But defense attorneys questioned how Beck could have been stealing from GUA when he turned it from losses to profits, saying he turned around a money-losing outfit, cutting losses by improving the process of underwriting insurance and cutting expenses by lowering the amount GUA paid others for reinsurance. That’s a way of getting other insurers to shoulder some risks.

“The truth is, he modernized the company with innovative business solutions,” defense lawyer Randy Chartash told jurors. “He saved them money; he made them money.”

Chartash said prosecutors must prove Beck intended to harm GUA, not just that some of his methods might have been underhanded.

“Intent to deceive alone, without the intent to cause loss or injury, is not enough,” Chartash said. “Jim Beck made them a profit, a profit they had not made in 40 years. That is not causing a loss or injury, or intended to cause a loss or injury.”