DEPARTMENT OF JUSTICE

UNITED STATES ATTORNEY GRETCHEN C.F. SHAPPERT
WESTERN DISTRICT OF NORTH CAROLINA

FOR IMMEDIATE RELEASE
MONDAY, APRIL 7, 2008

FORMER INSURANCE AGENT SENTENCED TO 37 MONTHS Agent of Former Charlotte Insurance Agency Guilty of Conspiracy and Mail Fraud Charges CHARLOTTE, N.C. -- United States Attorney Gretchen C.F. Shappert, and Jim Long, North Carolina Commissioner of Insurance, announce that Calvin Mitchell McKeel, 69, an insurance agent licensed by the North Carolina Department of Insurance for over 35 years, has been sentenced to a term of imprisonment of 37 months and has paid restitution of more than one million dollars. McKeel pled guilty in July 2007 to (1) conspiring to defraud insurance companies and insurance customers, and (2) committing mail fraud in connection with the insurance fraud scheme. The sentence was imposed in Charlotte on Thursday, April 3, 2008 by U.S. District Judge Martin K. Reidinger for the Western District of North Carolina.

McKeel, presently of Troutman, NC, was an insurance agent licensed by the North Carolina Department of Insurance and owned and operated Realty Insurance Services, Inc. (RIS) and other entities related to the insurance industry. RIS had contractual authority to sell personal and commercial insurance policies to consumers on behalf of numerous third-party insurance companies. McKeel defrauded insurance companies with whom RIS did business out of premiums collected from RIS’ customers. As part of the scheme, McKeel and RIS pretended to issue insurance policies to its customers in order to collect premiums for those policies, all the while hiding these “policies” from the insurance companies in whose name they were issued.

McKeel also hid from RIS customers the fact that no insurance policies were issued because McKeel did not forward their premiums or record the contracts with the purported issuers. McKeel admitted that RIS kept all of the proceeds of these “insurance contracts.” McKeel also admitted that RIS would provide consumers with false account numbers for the policies purchased” from the third-party insurance company and even bill customers for increased premiums as the contracts came up for annual renewal. Some homeowners who were customers of RIS learned that they did not have current insurance policies when they tried to submit claims on their policies. The various insurance companies represented by RIS paid the claims nevertheless, thereby incurring approximately two million dollars in losses after set-off of the commissions which RIS could have legitimately kept if the policies had been properly issued.

No homeowner claims were left unpaid as a result of McKeel’s offenses. As part of his plea agreement and separate civil settlements, McKeel agreed to pay restitution in excess of one million dollars to the insurance companies he defrauded. Approximately $6,000 remains to be paid.

Those victims include the following insurance companies:
Capital City Insurance
Foremost
Montgomery - Peerless Ins.
Vesta-Shelby
AFLA Virginia Mutual Ins. Cos.
Zurick Insurance Services, Inc.

U.S. Attorney Gretchen Shappert credits the North Carolina Department of Insurance with leading the investigation that resulted in the filing of the charges. The government is represented in this matter by Assistant U.S. Attorney Michael E. Savage, Chief of the U.S. Attorney’s Criminal Division in Charlotte.

Calvin Mitchell McKee
Troutman, North Carolina

CONTACT: SUELLEN PIERCE,
U.S. Attorney’s Office
Charlotte, NC 704.338.3120
or
CHRISSY PEARSON
NC Department of Insurance
Raleigh, NC 919.733.5238