Third Man Pleads Guilty in Fake Insurance Scheme

A third man has pleaded guilty in federal court in Houston to conspiracy to launder money in a scam involving the sale of bogus insurance, federal officials reported.

U.S. Attorney Kenneth Magidson and Lucy Cruz, special-agent-in-charge of Internal Revenue Service — Criminal Investigations (IRS-CI) said accountant Malchus Irvin Boncamper, 56, of the Federation of St. Kitts and Nevis, West Indies, admitted to conspiring to launder the proceeds of a fraud scheme that sold fake liability insurance policies over the course of more than 10 years.

The policies were sold to businesses throughout the United States and elsewhere, including a company called Shoreline Cruises Inc. which operated a 40-foot tour boat called the Ethan Allen on Lake George, N.Y. The tour boat operator discovered its insurance policy was fictitious after the Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 elderly tourists.

According to federal officials:

• Boncamper acquired four insurance companies for the scheme in St. Kitts and Nevis — Commercial Acceptance Indemnity Ltd., United Re-insurance Group Ltd., Polaris International Ltd. and Brentwood Re Ltd. — and created financial statements listing assets he knew were worthless, including bonds purportedly guaranteed by a fictitious Swiss bank.
• A co-conspirator sent Boncamper’s financial statements to Shoreline Cruises in October 2004 to convince its owners to purchase the fictitious insurance.
• Boncamper opened bank accounts to hold premiums obtained through fraud, including an account in Liechtenstein.

Five other defendants were charged along with Boncamper. Christopher Purser has pleaded guilty to conspiracy to commit wire fraud, while Edmund Benton pleaded guilty to conspiracy to launder money. Co-defendant Robert Steve Mills is set to begin trial on April 16, 2012. The remaining two defendants are pending extradition.