An Atlanta-area insurance broker received a federal prison sentence this week after being charged with collecting $3.7 million in premiums for client policies he never purchased.
From 2013 to mid-2014, John Paul Kill of Appeals Insurance Agency swindled more than 800 commercial trucking companies in nearly a dozen different states. Kill was convicted of charging his clients for cargo insurance policy premiums, amassing millions of dollars, while the trucking firms unknowingly operated without coverage.
Investigators with Georgia’s Insurance Commissioner’s Office discovered the fraud and – once realizing it involved customers in multiple jurisdictions – requested assistance from the FBI. The ensuing joint investigation culminated with Kill pleading guilty in federal court. Now, he will serve four years in a federal prison and pay $1.23 million in restitution to his victims.
His license to sell insurance in Georgia was also revoked.
According to the FBI, Kill operated out of his basement, advertising his services through word of mouth and making cold calls to commercial trucking companies. He would solicit retail insurance agents to write policies for these trucking companies and then claim to bind those policies, some of which he claimed came from recognized insurers like Lloyd’s of London.
For some clients, Kill did bind the cargo insurance policies, though they offered less extensive coverage than what the trucking companies thought they had purchased. Most of the time, however, his clients received no policy at all.
In addition to using the premiums sent to him by the trucking companies for his own benefit, Kill used a portion of the funds to pay off insurance claims that were filed with his office. Since most of his customers had no actual insurance coverage, he paid their claims so he wouldn’t raise their suspicions—he wanted to prolong the life of his illegal scheme for as long as possible.
The scheme began to unravel when a concerned retail agent sent Lloyd’s of London a copy of a contract supposedly bound by Kill, but which was actually fraudulent. Lloyd’s then contacted the Georgia Insurance Commissioner’s Office to file a complaint.
The office investigated, and subsequent search warrants uncovered bank ledgers showing that Kill, through his insurance agency, deposited the illegal proceeds of his fraud into this own personal bank accounts.
Kill even admitted to creating insurance policy cover sheets for insurance agents and customers to make them believe they had purchased cargo theft insurance.
In addition to the actual trucking companies, Kill’s victims included the insurance agents and insurance agencies who wrote the policies—many were significantly affected by Kill’s actions in terms of monetary losses, harm to their reputations, and civil lawsuits filed by the trucking companies.
At the time of Kill’s guilty plea, FBI Atlanta Special Agent in Charge J. Britt Johnson said, “This case was about theft and greed. Mr. Kill displayed a complete disregard for his client companies, leaving them legally and fiscally vulnerable while allowing them to believe that they had appropriate insurance coverage. The FBI is pleased with the role it played in bringing this case forward for prosecution and holding Mr. Kill accountable for his actions.”
