3 Testify Former Georgia Insurance Commish Directed Money From Insurer
ATLANTA (AP) — Sonya and Steve McKaig were close friends with Jim Beck until they got a look at the evidence that federal investigators had gathered against the now-suspended Georgia insurance commissioner. Then the friendship ended with the McKaigs saying they learned Beck was embezzling.
“I believed in Jim Beck,” Steve McKaig testified Wednesday, the second day of Beck's trial in federal court in Atlanta. “I believed he was an honorable man, an honest man with great ideas for Georgia, and he had been my friend.”
The husband and wife testified Tuesday that at Beck's behest they started doing business with the Georgia Underwriting Association. Beck directed they invoice the insurer for hundreds of thousands of dollars on behalf of a company named Green Technology Services, according to the testimony. Then, they said, they sent those checks to Beck.
Then Beck would hand the checks to his cousin, Matthew Barfield, who testified he would skim 10% without doing any other work besides creating invoices and give the rest to Beck. Barfield testified Beck told him that Beck was keeping 10% for himself and passing the rest to someone doing property inspections and collecting data.
But prosecutors say the McKaigs and Barfield, who haven't been criminally charged, were part of Beck's scheme to steal more than $2 million from the Georgia Underwriting Association, an insurer of last resort that Beck managed before he was elected insurance and safety fire commissioner in 2018.
Months after taking office in 2019, Beck was indicted on charges of mail fraud, wire fraud, money laundering and filing false tax returns.
Beck's defense has yet to present its case. Lawyers argued Tuesday as the trial opened that Beck hadn't hurt the association but instead turned it from losses to profits. They argue that Beck was an innovator and that even if his methods were unconventional, there's no proof he meant to hurt the association. They also suggested Green Technology Services provided useful data, even if witnesses were unaware.
Sonya McKaig testified that Beck asked her to start reviewing insurance applications for the association, which writes coverage for property owners who can't find it on the normal insurance market. The Georgia Underwriting Association, authorized under state law, is owned by state-regulated insurers who share in its risks.
Both McKaigs testified they did real work, although most billings were for money flowing to Green Technology Services.
McKaig said she reviewed information on applications, allowing GUA to charge correct premiums. Beck directed her each month to roll into her bill a separate bill from Green Technology Services. That amount was typically $28,700 a month, with Beck telling McKaig to mark up the amount by another 5% for herself, according to her testimony.
McKaig said she never had contact with Green Technology or Barfield. Bills for Green Technology were emailed by Beck from his personal email address, which Sonya McKaig said Beck directed her to use for correspondence. After getting paid by GUA, Sonya McKaig said, she would write a check to Green Technology that she would send marked “personal and confidential” to Beck at GUA's office.
“This was a pretty significant amount of money that he was in receipt of and he, being a hands-on manager, want to make sure the funds were received,” Sonya McKaig testified.
Steve McKaig testified Beck asked him to call people who filed water damage claims, advising them how to clean up and limit costly damages. Steve McKaig created a website and tip sheets.
“People would be delighted that someone would call,” McKaig testified.
But like his wife, Beck directed Steve McKaig to also bill GUA on behalf of Green Technology. Steve McKaig testified that Beck told him GUA was paying $200,000 to Green Technology to provide reinsurance against water damage. Reinsurance is when an insurer contracts with someone else to share part of the risk. Green Technology was not a reinsurance company, making the arrangement unusual, but Steve McKaig testified Beck told him Green Technology was owned by an unnamed rich investor who would bear the risk directly in exchange for the money. Like his wife's company, Beck would send Steve McKaig invoices from Green Technology to roll into his own bills, according to the testimony. Steve McKaig said he would then cut checks to Green Technology and send them to Beck.
Both McKaigs said they never questioned Beck's actions until prosecutors called them before a grand jury.
“I trusted him,” Susan McKaig said. “I trusted his wife. I felt like there were no better people.”
Defense attorney Bill Thomas suggested the McKaigs hadn't seen the whole picture, but Susan McKaig said she had seen enough: “We didn't wish to have any further contact.”