Earl O'Garro Jr. went on trial in US District Court December 8 on charges he attempted to defraud over $1 million from the city of
Hartford, the state, and from other insurance businesses.
Federal prosecutor Avi Perry revealed in his opening argument that O’Garro was stealing from his customers and business associates in order to pay off a $1 million luxury waterfront condominium that he had acquired in the Dominican Republic in 2013. He did this even while his brokerage, Hybrid Insurance, was deep in debt.
Perry noted that while O’Garro was swindling cash for the condo, he still could not afford it.
The prosecutor accused O’Garro of spending his clients’ insurance premiums to fuel his extravagant lifestyle, from paying tuition for his children at a private school, a $100,000 car, hotels, restaurants, bespoke suits, to a modest mansion in the suburbs.
The prosecution suggested that when his insurance business began to flounder, O’Garro ran his brokerage much like a Ponzi scheme, taking cash from a number of his clients and lenders in a failed attempt to cover his debts from others.
Susan Lombardo, an accountant who previously served O’Garro as the brokerage’s assistant controller, testified in 2013 that Hybrid had no controller. She added that she was unable to report on company finances, as O’Garro kept the business bank statements only to himself. She finally quit the brokerage nine months later after being overwhelmed by notices that client policies were being canceled, as Hybrid was intercepting premium payments.
Chad Gabrielsen, senior manager at Capital Premium Financing, also testified against O’Garro. He said O’Garro used deceptive applications and bogus email correspondence to fool everyone that he was borrowing from to finance the premiums on policies he purchased from a major insurance wholesaler for 4 of his clients.
The 4 “clients,” the prosecution asserted, were actually paper companies O’Garro had set up, and that he faked the email to trick people into thinking that the wholesaler had issued the 4 policies.
O’Garro was indicted of defrauding the state by exaggerating the value of Hybrid’s assets when he was applying for a $500,000 low-interest loan from the Department of Economic and Community Development. He was at risk of defaulting around that time on a $126,000 loan and grant package the state had given him before, and he eventually defaulted on that loan.
O’Garro was also charged with swindling insurers and clients, as well as the City of Hartford, of around $1.3 million in insurance premiums.
