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Insurance Agent Pays Back $1.7 Million Unlawfully Obtained

Insurance Agent Pays Back $1.7 Million Unlawfully Obtained

Thursday’s Post 11/17/11 -  Connecticut regulators have agreed with, William Gallagher Associates, a Property & Casualty Insurance Agent based in Massachusetts, to  pay $100,000 in penalties and give back $1.7 million to the Connecticut’s State General Fund. The penalties are part of the settlement between the insurance broker and Connecticut regulators over a case filed by Milford Power Company, where the power company alleged that William Gallagher Associates had unlawfully overcharged them by more than $2 million. Connecticut regulators point out Gallagher was involved in a variety of questionable activities that involved questionable bookkeeping. The schemes employed by the brokers ranged from issuing dummy invoices to clients and concealing fees and commissions when invoicing clients to altering their original policies. The firm also deliberately covered up their activities by keeping two different sets of accounting books. Connecticut Attorney General, says that William Gallagher Associates will have to refund the money to the Connecticut State Fund that they obtained through unlawful charges.

This is not the first time this insurance broker has been involved in these shady practices. Officials claim that this firm’s accounting records show that they were involved in inappropriate bookkeeping practices from as early as 2002.  In the year 2007, the firm paid close to $4 million to Massachusetts authorities as settlement for similar practices.  It seems this company has yet to learn from its past. The firm was found to have violated an act in the state that deals with unfair trade practices. It was also found to be in violation of the rules laid out in the act that deals in unfair insurance practices.  Analysts point out that questionable bookkeeping procedures are one of the ways companies use to overcharge unsuspecting clients or inflate their profit margins. There are several companies that are on record for deliberately misrepresenting the real facts to their shareholders by ‘cooking the books.’ These professional crimes are punishable by heavy penalties that are meant to act as deterrents for such practices. Based on my research, William Gallagher does not market and personal insurance products such as  Auto Insurance  or Homeowners Insurance. They appear to market to the business community with a full range of professional liability Insurance Products.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602