Mont. U.S. Attorney: Owner of Insurance Company in Rosebud County Charged in Scheme to Defraud Customers

BILLINGS, Montana, July 25 -- The U.S. Attorney for the District of Montana, Jesse Laslovich, issued the following news release on July 24, 2023:

A Forsyth woman accused of defrauding customers through her insurance company, Rosebud County Insurance Inc., by spending client payments on personal expenses appeared today on charges, U.S. Attorney Jesse Laslovich said.

Kileen Moria Hagadone, 57, pleaded not guilty to an indictment charging her with six counts of wire fraud and three counts of aggravated identity theft. The maximum penalty for wire fraud is 20 years in prison, $250,000 fine and three years of supervised release. The penalty for aggravated identity theft is a mandatory minimum two years in prison, consecutive to any other punishment, a $250,000 fine and one year of supervised release.

U.S. Magistrate Judge Timothy J. Cavan presided. Hagadone was released pending further proceedings.

The indictment alleges that Hagadone owned and operated Rosebud County Insurance Inc., an insurance brokerage business, and acted as an intermediary between her customers and national insurance companies. Hagadone was required to help negotiate insurance contracts for her customers and then receive and transmit payments as a fiduciary from the customers to the companies for the negotiated policies. Hagadone and her company had a trust account with First State Bank of Forsyth designed to receive these payments.

As alleged in the indictment, from about 2020 until April 2023, Hagadone devised a scheme to receive payments from customers but failed to transmit the funds to the insurance companies. Instead, Hagadone misappropriated the funds and spent the money on personal expenses. In some instances, Hagadone fraudulently withdrew the money for her own use from the company trust account. At other times, Hagadone improperly deposited customer payments into the company's business account so she could use the money. To help conceal the thefts, Hagadone allegedly stole the identities of several customers by forging their signatures on third-party financing contracts. As a result of the alleged scheme, many customers had their insurance policies canceled without their knowledge and had to repay the insurance companies for policies they had already paid for.

An indictment is merely an accusation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Assistant U.S. Attorney Colin M. Rubich is prosecuting the case. The Montana State Auditor, Commissioner of Securities and Insurance, FBI and Rosebud County Sheriff's Office conducted the investigation.

PACER case reference. 23-85.

The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html . To access the District Court's calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl

* * *

Original text here: https://www.justice.gov/usao-mt/pr/owner-insurance-company-rosebud-county-charged-scheme-defraud-customers