The Texas Department of Insurance (TDI) announced that seven people who were arrested in the Houston-area in connection with an alleged scheme to defraud insurance companies by intentionally flooding homes and filing bogus claims pleaded guilty or have been convicted on fraud charges.
The scheme cost insurers more than $5 million.
TDI said Ramnath Ramcharan of Bay City, was found guilty on one count of conspiracy, four counts of mail fraud and ten counts of money laundering. Ramcharan was the only defendant to seek a jury trial. Sentencing for Ramcharan and six defendants who had already pleaded guilty has been set for December 12 in U.S. District Judge Sim Lake’s courtroom.
The six defendants who pled guilty to various charges of insurance fraud are Johnny Duane Staples of Baytown; Janell Staples of Baytown; Billy Bob Staples of Conroe; Teresa Ann Staples of Bay City; Don Edward Mitchell of Tomball; and Daniel E. Terry of Broussard, La. The defendants face up to 20 years in prison and substantial fines.
The seven were arrested on June 27 by investigators with TDI, the Federal Bureau of Investigation and the U.S. Postal Inspection Service following the return of indictments by a federal grand jury.
The defendants allegedly purchased and insured several two-story homes. Then, according to TDI, pretending to be away for the weekend the defendants intentionally flooded the homes with water hoses or by damaging water pipes. The water lines would be repaired before an adjuster arrived. The defendants would file claims to obtain the full policy limits of the insurance coverage for their damaged personal property along with additional living expenses. Some homes were flooded more than once. At least one house was “cooked” to encourage the development of mold. Insurance companies paid claims in excess of $5 million.
The defendants reportedly served as homeowners, independent sub-contractors, vendors and service providers in filing claims, repairing the damage and selling the homes to each other to repeat the process. Homes in the greater Houston area, Bay City and Austin were used in the insurance fraud scheme.
Was this article valuable?
Here are more articles you may enjoy.
What Disruptions Have Been Reported After the Global Tech Outage? 
Study Urges Rethinking of Disaster Management in Era of Compounding Events 
Viewpoint: Deepfake Fraud Is On the Rise. Here’s How Insurers Can Respond 
Wall Street Pushes Back After Activists Escalate Protests 
