Enforcement Actions Include 14 License Revocations; More Than $900,000 in Penalties

HARRISBURG, Pa., Nov. 5 /PRNewswire-USNewswire/ -- Pennsylvania Insurance Commissioner Joel Ario today said a former Allegheny County insurance agent who forged client signatures and cashed annuities without approval is one of the individuals and entities who were found guilty of violating insurance laws during the third quarter.

Ario said Thomas C. Helbig, a former insurance producer from Carnegie, Allegheny County, who was found guilty of defrauding clients, has had his license revoked for 25 years. Helbig must also pay $120,000 in fines and restitution.

"Through our investigation, we found that Helbig abused his position as a licensed insurance producer without regard for the individuals he was to counsel and help," Ario said. "The financial harm he is guilty of committing makes him incapable of possessing the trust and integrity necessary for this profession.

"Our investigation confirmed that Helbig forged his clients' signatures and cashed in part of his clients' annuities without their consent.

"He victimized one of his clients over the course of several years while claiming to act as her 'financial advisor' by charging exorbitant advisory fees, recommending transactions that resulted in surrender charges and fees, and failing to ensure the suitability of the transactions - all for his own personal gain."

Helbig was found guilty on 12 counts of violating certain aspects of insurance law and other statutory provisions, including:

    --  Misrepresenting the terms of an actual or proposed insurance contract or
        application;
    --  Misappropriating money received in the course of business;
    --  Forging another's persons name on an application for insurance or
        financial service;
    --  Breaching fiduciary duty;
    --  Failing to disclose statutorily required information to a policyholder
        and charging additional, inappropriate fees;
    --  Using fraudulent, coercive and dishonest practices; and
    --  Lacking general fitness, competence or reliability

Helbig's insurance licenses are revoked for a period of not less than 25 years. He must pay a civil penalty of $82,500 and he must make restitution to a victimized client for $47,000.

The Pennsylvania Securities Commission also revoked Helbig's registration as a securities agent, permanently barred him from engaging in securities transactions and related activities, and imposed a penalty totaling $81,000.

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"The Insurance Department continually monitors the insurance marketplace for unlawful behavior, and when we find individuals or entities who are not following insurance laws, or who are operating without an insurance license, we take action against them accordingly," Ario said.

An enforcement action, by definition, is the result of an investigation or examination that reveals a violation of Pennsylvania insurance law. Actions can result in fines, restitution, cease and desist orders, license supervision or a revocation/surrender of a license.

A comprehensive list of all enforcement actions and market conduct examinations from 1998, as well as a glossary of commonly used enforcement terminology, can be found at www.insurance.state.pa.us (keyword: enforcement). Each entry is listed alphabetically and includes the findings of fact, the violation(s) of insurance law that occurred and the order issued by the department.

Anyone who has a question about their insurance coverage, or who suspects any wrongdoing on the part of their insurance company or producer (agent), should contact any of the department's Bureau of Consumer Services' regional offices: (717) 787-2317, Harrisburg; (215) 560-2630, Philadelphia; or (412) 565-5020, Pittsburgh.

EDITOR'S NOTE: The following is a list of enforcement actions concluded by the Insurance Department in the 3rd quarter of 2008, by county. In some cases, the parties referenced did not admit any liability. Those interested in seeking additional information are encouraged to review the actions in their entirety at www.insurance.state.pa.us, (keyword: enforcement)

Adams

George M. Hudson - Gettysburg - License revocation for various convictions relating to drug charges in 2004 and, while incarcerated, renewed his motor vehicle physical damage appraiser license in 2005, 2006 and 2007.

Allegheny

Cora E. Better - Pittsburgh - Three-year license supervision for failing to respond to six departmental requests for information.

Louis J. Fani Jr. - Pittsburgh - Three-year license supervision for a 2005 misdemeanor conviction that was fully disclosed on his license application.

Richard J. Pankowski - Pittsburgh - $1,000 penalty and three-year license supervision for unlicensed activity, misrepresentation using unapproved forms and replacement violations; and license surrender in the state of Montana.

Judy L. Reedy - Pittsburgh - Prior felony conviction, Section 1033 waiver, ongoing supervision of producer license.

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Donald E. Smallwood Jr. - Gibsonia - License revocation and five-year future license supervision for misappropriating $53,000 of a policyholder's annuity payment and creating a fictitious annuity from another policyholder's form.

Bucks

Todd B. Garry - Newtown - Five-year license supervision for operating under a non-registered name and misrepresenting himself as an estate planner.

Michael Goncharsky - Bensalem - Five-year license supervision (public adjuster license) for failing to report a 2007 theft by deception arrest and conviction.

Anthony J. Iwasko IV - Feasterville - License revocation and five-year future license supervision for failing to report a 2007 arrest for insurance fraud, false reports to law enforcement, possession of child pornography and criminal use of communication facilities; ultimately plead guilty to the charges this year.

Francis P. Terragrossa - Morrisville - Three-year license supervision for failing to report two previous misdemeanor convictions on the initial producer application.

Butler

Bryant R. Filter - Mars - Surrendered producer license for admitting to collecting more than $4.2 million in 2006 and 2007 by falsifying insurance applications to collect multiple premium financing payments made to non-existent clients.

Chester

Lee E. Davis - West Chester - License surrender and five-year license supervision for previously collecting premiums for policies never issued and failing to report three criminal arrests in 2006 at the time of his license renewal.

David Peter Moon - West Chester - Five-year license supervision for making false statements and allegations about his former employer to former clients.

Mark Watkinson - Paoli - Five-year license supervision for pleading guilty in 2006 to access device fraud.

Columbia

Jeffrey B. Neyhard - Bloomsburg - License revocation and five-year future license supervision for failing to notify the department of his arrest, conviction and guilty verdicts this year for three misdemeanors and two summary offenses.

Cumberland

James A. Minetola III - Camp Hill - License revocation and five-year future license supervision for pleading guilty in 2008 to one felony and one misdemeanor offense.

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Dauphin

Dominick D. Mazza - Harrisburg - Unlicensed since surrender of license in 2007, five-year future license supervision for altering policyholder information on applications.

Delaware

James T. Bradley Sr. - Broomall - Five-year license supervision for misrepresenting information on a policyholder's auto insurance policy.

Brokerage Professionals Inc. - Media - $3,000 penalty and future license supervision for procuring surplus lines insurance and collecting premium in 2006 that netted $11,289.03 in surplus tax that was not remitted to the state Department of Revenue until March 2008.

Philip Duval, PH Insurance Agency - Chester - $10,000 penalty and five-year license supervision for insufficient funds in 2005 and 2006.

Michele N. Paquin - Glenolden - Three-year license supervision for failing to provide a copy of an appraisal to a repair shop.

Lackawanna

Steven W. Krauss - Moscow - Surrender of professional bail bondsman license and five-year future license supervision for failing to disclose three felony convictions in Connecticut from 1993, while indicating no criminal charges on his Pennsylvania licensing application and subsequent renewals.

Lancaster

Patrick J. Gehris - Lancaster - License revocation for failing to report guilty pleas for two felony arrests and convictions in 2008.

Lehigh

Thomas B. Serfass - Center Valley - Without admitting to the allegations, license revocation for collecting $390,000 from four policyholders and failing to forward those funds to an insurance company, failing to report a 2007 arrest for insurance fraud, theft and solicitation for nonexistent insurance entity; and trading as an unlicensed entity.

Luzerne

Charles J. Oleski - Wilkes-Barre - license revocation for failing to notify the department of a prior felony arrest.

Monroe

Jessica R. Schotter - Mt. Pocono - License revocation for failing to report several felony and misdemeanor arrests in 2008 and is currently incarcerated.

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Montgomery

American Diversified Services Inc. - Horsham - $5,000 penalty and five-year license supervision for failing to timely remit policyholder premiums, resulting in cancellation notices being sent to homeowners. All policies were reinstated.

Ariel Monzon - Lansdale - Five-year license supervision for failing to report a 2007 arrest.

Hull & Company Inc. - Horsham - Without admitting to the allegations, $16,000 penalty, three-year license supervision for failing to timely remit homeowners insurance premiums, resulting in 65 cancellation notices.

John Walker - King of Prussia - Prior felony conviction, Section 1033 waiver, ongoing supervision of producer license.

Montour

Paul A. Harris - Danville - $1,000 penalty and five-year license supervision for submitting false applications to Combined Insurance Company of American for non-existent people.

Philadelphia

Raymond B. Jewell - Philadelphia - $1,000 penalty and five-year license supervision for misrepresenting the terms of a life insurance policy, and use of another insurance producer to sign the policy as the producer of record.

Warren M. Kukish / PA Auto Insurance Outlet - Philadelphia - $5,000 penalty and three-year license supervision for charging undisclosed fees.

Lorena Mierau - Philadelphia - $8,000 penalty and five-year license supervision for selling and misrepresenting annuity products not authorized in Pennsylvania between 2004 and 2007.

Snyder

Alice M. Stelter - Selinsgrove - Three-year license supervision for failing to disclose that she was a licensed insurance producer in correspondence to long-term care insurance, while indicating that she was a licensed certified senior advisor.

Washington

Larry M. Celaschi - Stockdale - Five-year license supervision for selling an insurance policy without proper appointment authority and using his personal money to make a premium payment for a policyholder.

Michael N. Giffin - Canonsburg - $5,000 penalty and five-year license supervision for submitting a change of record form that contained a forged signature.

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Out of State

Encompass Insurance Company - Northbrook, IL - $10,000 and cease and desist order for untimely submission of workers' compensation accident & illness prevention report.

Nassau Employees Benefits Trust, c/o Larry Magarik Esq. - New York, NY - Cease and desist order for operating as an illegal insurance operation (unlicensed MEWA) resulting in approximately $2 million in unpaid claims. Claims have been paid by the stop loss insurance company.

Debbie L. Madosky - Medford, NJ - License revocation and future license supervision for pleading guilty to a 2007 felony offense.

Safeco Insurance Company of America - Seattle, WA - $40,000 penalty for mailing more than 2,400 cancellation notices that failed to include required disclosures. Company must offer to reinstate or rewrite coverage at the consumer's option.

Security Life of Denver Insurance Company - Denver, CO - $20,000 penalty for honoring a request to have three insurance policy statements be sent to an unlicensed individual and subsequently allowing the individual to receive commissions, falsify documents and misappropriate cash values totaling $217,471.

The Assurance Group - Archdale, NC - $5,000 penalty and two-year license supervision for mailing deceptive advertisements to Pennsylvania homeowners in 2007.

James W. Wolf, Jr. - Ellicott City, MD - Three-year license supervision for procuring three surplus lines polices during 2004 with proper licensure.

    Market Conduct Examinations
    1st Choice Auto Insurance Co.             $15,000 penalty
    American Modern Select Ins. Co.           $18,000 penalty
    Clearfield County Grange Mutual Fire      No penalty
    Cumberland Mutual Fire Ins. Co.           No penalty
    Hartford Ins. Co. of the Midwest          No penalty
    Hartford Casualty Insurance Co.           No penalty
    Hartford Ins. Co. of the Southeast        $15,000 penalty
    Healthmarkets, UICI Mega, Midwest         $707,217 penalty
    HMO of Northeastern PA                    $20,000 penalty
    Mid-Continent Insurance Co.               $12,500 penalty
    Phoenix Life Insurance Co.                No penalty
    United Security Assurance Co. of PA       No penalty

CONTACT:

Rosanne Placey or Melissa Fox

(717) 787-3289

SOURCE Pennsylvania Department of Insurance

CONTACT: Rosanne Placey or Melissa Fox of the PA Department of Insurance, +1-717-787-3289