Court hears inner workings of SC Irish Travelers' multimillion-dollar insurance scam - Insurance News | InsuranceNewsNet

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December 7, 2018 Newswires
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Court hears inner workings of SC Irish Travelers’ multimillion-dollar insurance scam

State (Columbia, SC)

Dec. 07--COLUMBIA, S.C. -- An insurance agent was sentenced to five years in prison Friday for his role in a long-running scam that netted millions of dollars for members of Aiken County's secretive Irish Travelers community.

For years, Douglas Wade Williamson was a key player in that life insurance scam, a prosecutor told a U.S. district judge Friday.

"What he did was set up a system for $54 million to be paid out to the Irish Travelers community," Assistant U.S. Attorney Jim May said at Williamson's sentencing hearing. "He was an active participant who made his living on fraud."

During a two-hour hearing at Columbia's federal courthouse, a FBI agent testified fraud was involved in about a quarter of those policies, worth roughly $13 million. Williamson, who is not an Irish Traveler, enabled the scheme, used by numerous members of the secretive group, the agent testified.

U.S. District Judge Michelle Childs handed Williamson, 55, of the North Augusta area the toughest sentence possible -- 60 months in federal prison --for conspiring to commit wire and mail fraud.

While federal officials previously have referred in court to life insurance schemes by the Travelers, Friday's hearing offered the most detailed look yet at how the schemes generated money for the group, which has been implicated in numerous frauds in recent years.

A major source of wealth in the Irish Travelers community comes from fraudulently obtained life insurance policies that are written on sick and elderly Travelers with short life expectancies, May told the judge.

Normally, life insurance policies with big payouts only can applied for by the policy holder or a relative. The application also has to contain accurate information about the insured person, including their income and net worth. The bigger the income and net worth, the bigger the possible payout.

Williamson sold more than 400 life insurance policies to the Travelers with a payout value of $54 million, retired FBI agent Ron Grosse testified. About a fourth of those policies were fraudulent, testified Grosse, who was the lead agent on the half-decade-long investigation.

For example, few Travelers women work outside the home, making their lives difficult to insure for a large amount, Grosse testified. But Williamson wrote 200 life insurance policies for Travelers women, including 68 showing the women had substantial income or a large net worth, Grosse testified.

Grosse testified the frauds included:

-- Eleven different policies, written by Williamson, on a chain-smoking, unemployed Irish Traveler woman named Margaret Sherlock, who lived in a camper. One of those policies paid out $400,000 when she died.

-- A female Traveler named as the beneficiary on five policies, written by Williamson, claiming three different men as her father.

-- Numerous life insurance policies, written by Williamson for various Travelers, on a dying man named John Fitzgerald Carroll.

The average time that elapsed between the application for a policy and the death of the insured was about 4.8 years, Grosse testified. "Often, the insured weren't aware the policy was being taken out on them."

Williamson had to know what was going because he filled out the applications with information dictated to him by Irish Travelers, Grosse testified.

Williamson didn't collect any of the money from the life insurance policies, making his money off commissions generated by the policies, Grosse said. But he was a "gatekeeper" for the scheme with "the ability to quash an application" if he knew it contained false information, the FBI agent said.

During a protracted back-and-forth with Judge Childs, Williamson said he had shown "bad judgment" but did not acknowledge he had done anything illegal.

When Williamson's lawyer, James Ervin, said his client had not been in court before, was not at ease or rehearsed, and couldn't be expected to say he was guilty of a crime, the judge had no sympathy.

"You don't have to be well-rehearsed to tell the truth," Childs said.

___

(c)2018 The State (Columbia, S.C.)

Visit The State (Columbia, S.C.) at www.thestate.com

Distributed by Tribune Content Agency, LLC.

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