Secretary headed to jail after $220k insurance scam

Auto repair shop employee stole nearly 200 insurance checks

Secretary headed to jail after $220k insurance scam

Insurance News

By Ryan Smith

A Rhode Island woman is headed to federal prison for stealing insurance payments meant for the customers of the auto repair shop where she worked as an office secretary, according to the Department of Justice.

Idalee Johnston, 48, devised a scam to steal the proceeds of nearly 200 checks sent to customers by their insurance companies for vehicle repairs, the Justice Department said. Johnston pleaded guilty to mail fraud and has been sentenced to two years in prison.

Beginning in 2016, Johnston used two methods to steal customers’ insurance payments. In some cases, she would not have customers sign direct-payment forms that would have caused payments to be made directly to the auto body shop for repair work. In other cases where customers did sign the payment forms, she would not forward them to the insurance companies. As a result, insurance checks meant to pay for auto repairs were sent directly to customers – who, at Johnston’s direction, gave the checks to her as a representative of the business.

Johnston admitted in court that she deposited some of these checks into her own bank account. In other cases, stolen checks were provided to family members to be deposited into their bank accounts. Later, at Johnston’s direction, these family members gave her most of the proceeds of those checks.

The scam continued for two years and resulted in a loss to the auto body shop of more than $220,000, according to the Justice Department.

After the completion of her two-year prison term, Johnston must serve two years of supervised release. She has also been ordered to pay restitution of $220,083 to the owner of the auto body shop.

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