What happened: An insurer that paid out more than $1 million under a fidelity bond alleges six people ran dual theft schemes using doctored payroll reports and dozens of prepaid cards.
Who's involved: National Union Fire Insurance Company of Pittsburgh (plaintiff/subrogee) and Endurance Warranty Services (the insured employer).
What's at stake: $1,040,731 in compensatory damages plus punitive damages.
Why it matters: The case illustrates how employees with payroll and prepaid card access can run parallel theft schemes for years - and what fidelity bond recovery looks like after the criminal case ends.
Where it stands: Civil complaint filed October 5, 2026, in the Northern District of Illinois. The related criminal case is concluded; two defendants are incarcerated.
More than 200 times, someone fed multiple prepaid cards into the same ATM within minutes - at a CVS in Chicago, at machines in Frankfort and Matteson, Illinois. One card was issued to a person who, according to the complaint, never worked at the company at all.
National Union Fire Insurance Company of Pittsburgh, an AIG subsidiary, filed the suit on October 5 in the US District Court for the Northern District of Illinois. The insurer is pursuing $1,040,731 from six defendants after paying out more than $1 million under a fidelity bond it issued to Endurance Warranty Services, a vehicle service contract provider.
Two of the defendants have already pleaded guilty to felony charges and are serving sentences in the Illinois Department of Corrections, according to the complaint. The civil suit is the insurer's effort to recover what it paid.
The complaint lays out two parallel operations. The first - a payroll scheme - began around August 2019. The second - a prepaid card scheme - started even earlier, around October 2018. Both ran until late 2021.
Endurance's payroll and benefits manager downloaded semimonthly payroll reports from the company's outside payroll provider and forwarded them to the chief financial officer for approval. According to the filing, she altered those reports - cutting or deleting line items that would have revealed unauthorized bonus and commission payments flowing to two sales managers and the company's HR manager.
The numbers were consistent. The complaint alleges the two sales managers each received roughly $11,750 per pay period when their authorized commission was approximately $3,750 - a difference of about $8,000 per check. Over 19 and 18 check dates respectively, the filing says one received approximately $151,500 and the other approximately $143,500 in excess pay. The HR manager allegedly received about $67,789 across 17 check dates.
Total payroll scheme losses, according to the complaint: approximately $362,789.
The second scheme used Endurance's Commerce Bank prepaid card program, set up to pay employee rewards and incentives. Both managers had administrative access to load funds onto the cards, the complaint states.
The filing alleges the two managers loaded unauthorized funds onto cards in their own names, in the names of associates and relatives, and in the names of former employees who had already left the company. One card was mailed to a manager's home address but disconnected from the company's card reporting system so the activity would not show up in payroll, according to the complaint. About half of each unauthorized load was pulled out at an ATM straight away.
The card-by-card breakdown in the complaint: $68,044 loaded for the HR manager, $50,094 for one of the sales managers, $8,815 for a relative of the payroll manager, and $4,246 for an associate of the HR manager. Beyond that, the filing alleges another $546,743 went onto cards in other people's names - and approximately $540,479 of that was loaded after those cardholders had already been terminated. That figure includes roughly $6,860 loaded for a person with no Endurance employment record at all.
What the cards bought, according to the complaint: one sales manager's card was used for "airline purchases, purchases at gun stores, and U.S. Treasury tax payments." The HR manager's card funded "online casino transactions and a purchase at an Audi dealership."
Total card scheme losses, according to the complaint: approximately $677,942.
On October 7, 2021, Endurance discovered unauthorized funds on the HR manager's paycheck, the filing states. The chief financial officer and chief talent officer launched a review of payroll records, which revealed the altered reports and the excess payments to the two sales managers.
A week later, on October 14, the company identified the prepaid card scheme - including the card that had been mailed to a manager's home and pulled out of the reporting system. The HR manager was terminated on October 27, 2021.
Endurance reported the theft to the Chicago Police Department. A Cook County grand jury indicted the payroll and HR managers on Class 1 felony charges, the complaint states. Both pleaded guilty and are now serving sentences in the Illinois Department of Corrections.
National Union had issued a financial institution bond to Endurance covering losses from employee dishonesty, subject to a $25,000 deductible. After Endurance filed a formal claim for $1,040,731, National Union verified the amount and paid $1,015,731. Endurance then assigned all of its rights against the six defendants to National Union, which now sues in its own name.
The complaint brings six counts - fraud, conversion, breach of trust, conspiracy, and two claims for return of the money - and seeks the full $1,040,731 plus punitive damages. None of the defendants have returned any portion of the funds, according to the filing.
The case is a textbook example of what comes after the fidelity bond claim is paid: the insurer steps into the employer's shoes and chases the money, even when two of the targets are already behind bars and the funds have long since been spent.
None of the allegations in the civil complaint have been tested, and no court has ruled on the merits of the civil claims.
