Michigan A.G. Schuette Charges Two in Insurance Fraud Scheme After Joint Investigation With Department of Insurance and Financial Services

LANSING, Michigan, Oct. 30 -- Michigan Attorney General Bill Schuette issued the following news release:

Michigan Attorney General Bill Schuette today announced his office has filed felony charges against Angella Swain and Cornell Jones for allegedly selling fraudulent insurance to customers. The charges are a result of a joint investigation by Schuette's Child, Elder, and Family Financial Crimes Division and the Department of Insurance and Financial Services.

Swain, 51, of Flint, is charged with the following 13 felonies:

* 1 Count of Conducting a Criminal Enterprise, a felony punishable by up to 20 years in prison;

* 11 Counts of Embezzlement by an Agent of more than $1,000 but less than $20,000, a felony punishable by up to five years in prison; and

* 1 Count of Using a Computer to Commit a Crime, a felony punishable by up to 20 years in prison.

Jones, 68, of Flint, is charged with one count of Conspiring to Conduct a Criminal Enterprise, a felony punishable by up to 20 years in prison.

"Michigan residents pay the highest auto insurance rates in the country, and fraud is part of the reason we have such high costs," said Schuette. "I want to thank DIFS as well as my Child, Elder, and Family Financial Crimes Division for their team work and dedication on this matter."

"These charges are a positive development that sends a strong message that those who commit fraud will be investigated, charged, and prosecuted," said DIFS Director Patrick McPharlin. "I am grateful to DIFS' staff and our partners at the Attorney General's office for their fine work on this matter."

Swain and Jones were arraigned on Monday, October 29, 2018 in the Genesee County 67th District Court in Flint in front of Judge David Guinn. Both defendants were released on Personal Recognizance bond. Their next court date is scheduled for November 8, 2018.

Case Background

An investigation was started by the Department of Insurance and Financial Services (DIFS) in June 2016 after an alleged victim reported that they had unknowingly purchased fraudulent insurance. DIFS identified the two defendants as the alleged individuals involved in selling fraudulent insurance. In September 2016 the case was referred to the Department of Attorney General for further investigation.

Swain was a licensed insurance agent in Michigan beginning in 2002 and operated Swain Insurance until 2013, when DIFS suspended her license for failing to remit premiums to insurance companies. Also in 2013, Swain's ex-husband Cornell Jones began operating Select Insurance Services, and Swain allegedly sold fraudulent insurance through Select. DIFS permanently revoked Swain's license in 2014 and Jones' license in 2016.

Between 2011 and 2016 it is alleged that at least twenty victims paid either Swain Insurance or Select Insurance for homeowners and auto insurance but never received coverage, and some victims did not discover they lacked insurance until they were in a car accident and tried to make an insurance claim.

The investigations found that Angella Swain allegedly pocketed some of her client's insurance premiums instead of remitting them to the insurance companies. It is alleged that Swain then issued clients false insurance certificates, leading them to believe they had insurance coverage when they did not.

A criminal charge is merely an accusation and defendants are presumed innocent until proven guilty.