Three Ex-Principals in Defunct Nebraska Agency Plead Not Guilty to Federal Charges

Three principals of a defunct Nebraska insurance agency, accused of bilking more than 250 people of $29 million, have pleaded not guilty to federal fraud and conspiracy charges.

Stella M. Levea, a former director, president and treasurer of First Americans Insurance Services Inc., James P. Masat, director, vice president and secretary of First Americans, and Kenneth W. Mottin, vice president, remain free on bail, U.S. attorney Deborah Gilg said in an e-mail. No trial date has been set because of the complexity of the case, she said.

A federal grand jury last month returned a 25-county indictment against the trio. They are accused of taking their clients' money and using it to prop up their business and enrich their personal lives. The three are charged with one count of conspiracy, 17 counts of mail fraud, and seven counts of defrauding insurance regulators for allegedly lying to regulators about the agency's debts (BestWire, Dec. 16, 2010).

Grand Island, Neb.-based First Americans, which specialized in services for Native American tribal groups, filed for bankruptcy two years ago with between $100 million and $500 million in debt with less than $10 million in assets (BestWire, Feb. 24, 2009). Nebraska Attorney General Jon Bruning said at the time that the agency's finances had the characteristics of a pyramid scheme. Some investors earned high fixed returns for months, even years and were encouraged to invest more while new investors were brought in to provide fresh infusions, the attorney general said. Levea, Masat and Mottin agreed to have their insurance licenses revoked (BestWire, Feb. 2, 2009).

Motions in the case are scheduled for April 14, Gilg said.

(By Diana Rosenberg, senior associate editor, BestWeek)