10-6-2003 -- Ruggerio, Barbara -- Sentencing -- News Release

Claims Manager Sentenced to 40 Months in Prison for Scheme to Defraud Insurance Company of $1.7 Million

TRENTON - A former Liberty Mutual Insurance Company Claims manager today was sentenced to 40 months in federal prison on mail fraud charges arising out of her scheme to defraud her employer of $1.7 million, U.S. Attorney Christopher J. Christie announced.

In addition to the prison sentence, U.S. District Judge Anne E. Thompson also ordered Barbara Ruggiero, 46, of Voorhees, to pay joint restitution in the amount of $1,704,336 to Liberty Mutual Insurance Company and to serve three years of supervised release upon completion of their prison sentences. Judge Thompson also forbid the defendant from working in the insurance field or any employment where she would have access to the finances of another.

Ruggiero, along with her former stepmother, Hope Thompson, 49, a/k/a Hope Faith Fowler, of Middle Township, entered their guilty pleas before Judge Thompson on May 22. A third co-defendant, Linda Pratt, entered her guilty plea to an Information in front of Judge Thompson on May 1, 2001.

According to the Informations to which they pleaded guilty, Ruggiero used her claims manager position with Liberty Mutual to issue fraudulent claim checks to her family members, including Thompson and Pratt, a cousin, who were not entitled to the payments. Both Informations state that Liberty Mutual had policies and procedures in place that prohibited employees from processing insurance claims for family members. According to Thompson's Information, Thompson was married to Ruggiero's father during the time frame of their scheme.

All three Informations stated that Ruggiero's duties included the supervision of more than 20 employees in Liberty Mutual's Marlton office and the authority to approve payment on insurance claims of up to $100,000.

At their plea hearings, all three defendants admitted that from June 1996 through June 1998 they conspired with each other to defraud Liberty Mutual through the fraudulent claim checks. Thompson admitted receiving four such checks at her former residence in Evesham Township, where she had lived with her former husband during the time period of the scheme. Pratt also admitted to receiving fraudulent claim checks made payable to her husband, endorsing and depositing the checks into their joint bank account. Furthermore, the defendants admitted that Ruggiero received kickbacks of as much as 60 percent of the value of the claim checks sent to her co-conspirators.

According to the Information, Thompson received 16 fraudulent Liberty Mutual checks totaling $260,095 and Pratt received 3 fraudulent Liberty Mutual checks totaling $79,650.

All three defendants pleaded guilty to one count of conspiracy to commit mail fraud. Hope Thompson was sentenced on September 10, 2003 to 5 years probation with a special condition of 6 months home confinement. In addition, Thompson was ordered to pay $271,735 in restitution with ½ of the amount due within 60 days and the remainder to be paid within the first year of her term of probation. Thompson's sentence was due in part to her cooperation with the United States. Pratt pleaded guilty in May of 2001 and is scheduled to be sentenced in December 2003.

Under U.S. Sentencing Guidelines, Judge Thompson, determined Ruggiero's actual sentence based upon a formula that takes into account the severity and characteristics of the offense and the defendant's criminal history, if any, according to Assistant U.S. Attorney Norv McAndrew.

Parole has been abolished in the federal system. Under the Sentencing Guidelines, defendants who are given federal custodial terms must serve nearly all that time.

Judge Thompson continued Ruggiero's $15,000 cash bail until Dec.1 when she must surrender to begin serving the prison term.

Christie credited Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Louie F. Allen, for developing the case. The Government is represented by Assistant U.S. Attorney Norv McAndrew of the U.S. Attorney's Office Criminal Division in Trenton.

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Defense Attorneys: Edwin R. Jacobs, Jr. Esq. Atlantic City

Francis J. Hartman, Esq. Moorestown