Wednesday, March 02, 2005

Georgia Insurance Scam

A father-and-son team in Barnesville GA allegedly ran a taxicab insurance scam that left thousands of cabdrivers across Georgia without coverage because the vehicles were never insured. Law enforcement officials say the taxi scam, which allegedly ran for more than two years, netted Godfrey Waterhouse and his son, Robert Waterhouse, more than $3 million in premiums. Robert Waterhouse was arrested Tuesday and charged with 40 counts of theft by deception, 40 counts of insurance fraud and one count of racketeering. Godfrey Waterhouse, who was charged with the same 81 counts, is in New Zealand, and state officials are seeking extradition.

The two were licensed to sell insurance in Georgia; the state is in the process of revoking their licenses. The pair allegedly signed up livery companies for policies by saying they were representatives of the Mark Solofa Company, an insurer based in Pago Pago, American Samoa. But Solofa executives told officials they had never heard of the Waterhouses and that they sell policies only to vehicles in American Samoa. They just picked the company's name and were using it. They were just issuing policies and collecting money.

4 comments:

UnknownVariable said...

Be advised that the link provided goes to a story about the impending machinist strike for Lockheed Martin.

Even tho I didnt RTA, I'll drop my $0.02.

I am amazed that scams of this nature can still occur in today's computerized society.

It's one thing to be able to scam uniformed insureds, but where's the due dilligence from Additional Insureds (for leased vehicles) and Leinholders to make sure this company was an admitted carrier in Georgia?

All it takes is a well placed phone call to the Insurance Comissioners office.

Other states Insurance Commissioners Offices websites have a searchable listing of admitter carriers. I couldnt find it for GA. Perhaps if they took a few minutes of effort to post such a listing, future scams of this nature could be avoided.

ALD said...

Link fixed.

I agree with your comments regarding the amazing ease with which this fraud was perpetrated.

Godfrey Waterhouse said...

My name is Godfrey Waterhouse and this comment is for the benefit and enlightenment of "unknownvariable" and "ald" who were both very quick to post comments back in March of last year when all the false accusations against my son and I were flying around. I wonder if they will be as quick to apologise, we shall see.
To "unknownvariable" I suggest that he pays a visit to the Georgia Insurance Code Section 33-5-21 and educate himself on Surplus Lines Insurance." The
Georgia Insurance Department DOES have a "searchable listing of admitted carriers," maybe "unknownvariable" shoulld search a little harder, or just stick to the number crunching activities of an actuary.
As far as "ald" is concerned, whatever happened to "innocent until proven guilty," and "Liberty and Justice for ALL?" I also suggest that both of you take a look at Georgia Insurance Code Section 33-1-16. NO CHARGES were ever brought against either my son or myself and all the "trumped up, unfounded allegations," which is what they were, were dismissed against my son in September 2005 and against me in April 2006. I am now back in georgia to "set the record straight," and here is one place where I am doing just that. A "Google Search" of "Cleared Insurance broker AP Atlanta" will produce quite a bit of information, for those interested in THE TRUTH!
As a bonus, I am posting below 3 articles that appeared as a result of my endeavours after my return to Georgia. The first, from The Augusta Chronicle,is,largely what the AP wrote. The second is from The Barnesville herald, the local paper of Barnesville, which was where our office was and the third is from Atlanta Progressive News. "Unknownvariable" and "ald" can easily go to the appropriate websites to verify these articles and so endure that I am not "scamming" them.I DO believe in "Uberima Fides," which is, apparently, more than can be said of some. Happy reading.
Geoff. Waterhouse
Cleared broker wants to sue insurance watchdog
Associated Press
Sunday, July 02, 2006

ATLANTA - More than a year after a father-and-son team from New Zealand were accused of selling bogus automobile policies to taxi and limousine services in Georgia, the father is organizing a class action suit against the state agency that filed the charges.




Associated Press
Geoff Waterhouse was accused of selling bogus policies, but the charges were dropped.
Click photo for options

Allegations that Geoff Waterhouse and his son Robert collected nearly $3 million in bogus insurance premiums were dismissed in June by the state Attorney General's office.

Now Mr. Waterhouse has returned to the U.S. from his New Zealand home to urge his former clients - more than 150 taxi and limo companies that were ordered to stop operations until they showed proof of other insurance for all their vehicles - to file a lawsuit against the Georgia Insurance and Safety Fire Commissioner's office.

"It was a load of rubbish," Mr. Waterhouse said in Atlanta. "The claims were paid. We did our checking. And it's taken them over a year to get it straight."

In March 2005, Insurance Commissioner John Oxendine said the policies sold by the father-and-son team were supposedly from Mark Solofa Insurance Co., an insurer in American Samoa. However, the premiums were never passed on to the insurer, and neither agent had a contract to represent Mark Solofa Insurance, he said.

Authorities raided the Waterhouses' local offices in Barnesville, a town about 50 miles south of Atlanta, seizing computer records and other files. An image splashed in newspapers across the state showed a triumphant Mr. Oxendine, sporting a brown trenchcoat, walking alongside Robert Waterhouse as authorities escorted him to jail.

Robert Waterhouse spent three weeks in jail and an arrest warrant was issued for his father, who was in New Zealand at the time. They both were charged with 40 counts of theft by deception, 40 counts of insurance fraud and one count of racketeering.

Some of the taxi and limo companies, however, were back on the roads the next day.

Mr. Oxendine still maintains that the Waterhouses were scamming the companies by selling fraudulent policies through their two companies, Phoenix Brokers Inc. and Main Street Brokerage Inc.

Investigators collected enough evidence to revoke the Waterhouses' insurance license and seize roughly $200,000 in assets to distribute to the wronged parties, Mr. Oxendine said. But not enough evidence was gathered to satisfy the state's criminal standard, so the charges were eventually dropped.

No lawsuit from Mr. Waterhouse or his former clients has been filed yet, and Mr. Oxendine said any effort to do so will be fruitless.

Mr. Waterhouse, who lives in New Zealand's Bay of Islands, said he still remains in the insurance business. And the Waterhouses are cooperating with Georgia's lawyers in another investigation, said Russ Willard, a spokesman for the state Attorney General's office.

"All of the allegations made against my son and I have been totally dismissed," he said. "They are without foundation."


From the Monday, July 03, 2006 edition of the Augusta Chronicle
walter geiger
herald-gazette

Waterhouse battling to clear his name
By Walter Geiger
In March 2005, Georgia insurance commissioner John Oxendine and a
phalanx of investigators - with the Atlanta media in tow - swooped
down on the office of Main Street Brokerage in downtown Barnesville,
shut it down and seized its assets.
One of the principals in the firm, Robert Waterhouse, was arrested at
the office of a Thomaston physician where his wife was being examined
prior to giving birth.
Warrants were issued for the arrest of Waterhouse's father, Geoffery
Waterhouse, who was in New Zealand at the time.
The case has never gone before a grand jury and all the allegations
against the Waterhouses have been dropped, according to the Georgia
attorney general's office.
On the day of the raid, Oxendine gathered his forces in Forsyth
before coming to Barnesville. He gave local law enforcement word of
the raid only 15 minutes beforehand. The local news media was never
informed. The raid ruined the relationship between the father and son
and the elder Waterhouse is working to repair it, struggling to clear
his name and has a long list of people whom he plans to take legal
action against.
"I would really like to see Mr. Oxendine in the same cell that my son
spent time in with the same people my son was in jail with," the
elder Waterhouse said last week.
He has also been critical of Barnesville mayor Dewaine Bell for a
comment he allegedly made in an interview with the Atlanta media and
district attorney Richard Milam.
Milam confirmed last week that the investigation has moved past the
Waterhouses.
"In this case investigators for the office of the Insurance
Commissioner of Georgia discovered that policies of insurance were
being sold to customers without the consent or knowledge of the
insurance company named in the policies. In fact each of the policies
sold was a forgery and each of the customers was defrauded of the
premium paid. The Attorney General filed a law suit and seized a
large sum of money which was used to compensate the victims of the
fraud. Through this investigation it was discovered that the parties
most culpable in this insurance fraud scam were located in New
Zealand. The Attorney General is continuing to pursue those parties
in an attempt to bring them to justice in this country," Milam said.
Geoffrey Waterhouse says he and his son were actually victims of the
scam.
At the core of the probe is a New Zealand firm known as Contractors
Bonding (CB). Its principals are Peter Harris, Tony Thomas and Nico
Francken, according to Waterhouse and press reports in New Zealand.
Waterhouse said his firm started dealing with CB in 2000. At that
time, Georgia's insurance code required alien insurers - firms not
based in the U.S. - to have been in business for 10 years and have
$10 million in surplus capital.
"CB said they met those requirements and sent us information
confirming it. We dealt directly with them for approximately two
years," Waterhouse said.
In about 2002, the insurance code changed limiting American firms to
using alien insurers on a listing generated by the National
Association of Insurance Commissioners (NAIC).
"CB was not on the list so they were knocked out. However, they told
us they were purchasing Mark Solofa Insurance in Pago Pago, American
Somoa," Waterhouse added. As a company doing business in an American
territory, Solofa was exempt from many of the rules governing alien
insurers.
"All they needed was $3 million in surplus capital and an NAIC
number. We kept on issuing policies. Only the name of the insurer on
them was changed," Waterhouse said.
The problem was, according to Waterhouse and investigators, CB never
purchased Mark Solofa Insurance.
"They even issued a press release saying they had bought Mark Solofa.
Solofa gave up its license in 2003. The people there knew nothing
about all this," Waterhouse alleged.
The attorney general's office hopes to charge the three CB principals
with fraud, according to Waterhouse. "I don't think they stole
anybody's money, We have a bit of disagreement on that point,"
Waterhouse said.
"All claims were paid. After we were shut down, CB sent $211,000.
Nobody is out of pocket," Waterhouse continued.
Margaret Witten, a Georgia insurance commission attorney, also
reported in a published interview that CB is now the target of the
probe. "CB is the current target of the ongoing investigation. There
is evidence to suggest that they are the persons who perpetrated the
crime," Witten said.
Waterhouse said Oxendine's raid hurt him severely - both personally
and financially.
"My son married a girl from Zebulon. We met with Al Adamson and
located in his building. We were very happy in Barnesville. Now I am
trying to repair my relationship with my son who blames me for all of
this. We always paid our claims. We paid over $1 million worth.
Oxendine says I stole millions. I am driving a tour bus in New
Zealand," Waterhouse said.
The insurer also said he feels Oxendine singled his firm out due to
headlines he could generate. Waterhouse's firm wrote policies for
many of the livery operations in Atlanta serving the airport.
"There was another broker in Suwannee, Georgia who used Solofa to
insure hot air balloons. They did virtually nothing to him,"
Waterhouse said.
His former business in ruins despite what he feels was no wrongdoing
on his part, Waterhouse is back in the United States seeking legal
redress on multiple fronts.
"They shut down our business. They seized all our assets. They
appointed a receiver who has gone through $200,000 in a year. That
was about all we had," Waterhouse concluded.
Despite their bitterness, both Waterhouses are assisting the stat in
the ongoing investigation into CB.
Update on an Oxendine Cab Scam Accusations
By Betty Clermont, Staff Writer, Atlanta Progressive News (July 03, 2006)

On March 1, 2005, after declaring his candidacy for Lieutenant Governor, Georgia Insurance Commissioner John Oxendine staged a media event - with himself in the starring role - to record the arrest of Barnesville insurance agent, Robert Waterhouse, as previously reported by Atlanta Progressive News.

Oxendine withdrew his candidacy for higher office the same day Waterhouse was granted a hearing and later, all 41 counts of theft, fraud and racketeering were dismissed.

Oxendine charged Waterhouse with selling "bogus" insurance and all 155 of his taxi-company customers, and hundreds of drivers, were told to stop serving their riders until other coverage was purchased. Finding affordable insurance coverage is a difficult and time-consuming chore for livery companies because they have a high exposure to claims.

The Atlanta Journal-Constitution reported Atlanta's tourism and convention industries were threatened by the commissioner's action.

According to The Insurance Journal, Oxendine admitted "numerous businessmen [are] in financial peril across the state."

Oxendine told the Associated Press, "even though the vehicle owners thought they were obeying the law, the taxis and limos must be pulled off the road because they are not legally insured….There will probably be some businesses that go under because of this.''

Back in February 1997, more than a year after the Georgia Court of Appeals declared taxi insurance companies owned by Solomon Bekele and his brother-in-law, Cheru Terefe, to be illegal, Georgia Insurance Commissioner John Oxendine explained his third postponement of a hearing to revoke their license to The Atlanta Journal Constitution: "Oxendine says closing all the self-insurers could force hundreds of cabbies to park their vehicles or to begin driving with no insurance. 'Regulation is a balancing act,' Oxendine said. 'If you take away the cabs, what does that do to the citizens?'"

APN noted in our previous story that Bekele and Terefe are major contributors to the Commissioner's political war-chest. As owners of the largest taxi fleets and taxi insurance companies in Georgia, they would naturally stand to benefit when Oxendine put their competitors out of business.

Another person who may have come out ahead when Waterhouse lost his business is Macon attorney, John Kennedy. When Towiliga-circuit District Attorney, John Milam, seized the Waterhouse bank accounts – reportedly between $200,000 and $293,000 – the funds were put under receivership to be administered by the court-appointed Kennedy. The money was supposed to be used to pay accident claims and reimburse customers' premiums.

On April 27, 2006, during a hearing held at the Monroe County Courthouse, Assistant Attorney General David McLaughlin alluded to "administrative fees eating up the money," although not a single penny had yet been disbursed for either purpose.

In the investigation conducted after Waterhouse was imprisoned and his family business destroyed, the company they represented, Contractors Bonding Limited (CBL), was criminally charged with selling "fake" insurance. McLaughlin said he was planning a trial to take place this summer.

A source close to the proceedings said CBL had been anxious to pay all outstanding claims right from the start of the state's prosecution, just as claims had been promptly paid all along since the Waterhouses first contracted with CBL. However, CBL was stonewalled by Georgia officials until the government named a claims-adjusting company of their own choosing. The new company was named at the hearing and authorized to begin settlements using additional monies provided by CBL .

On June 7, 2006, Godfrey (Geoff) Waterhouse, Robert's father and business partner, arrived in Atlanta from New Zealand. The same charges had been filed against him preventing his return until they were dismissed.

At the time of Robert's arrest, it was reported the senior Waterhouse was "on the lam." "That's patently absurd," Waterhouse said. "We obviously had no inkling that the authorities would swoop down and take Robert off to jail." In March 2005, Waterhouse was in his own home in New Zealand.

Geoff Waterhouse said his dream of a financially secure retirement has disappeared with the loss of his business and expenses incurred this past year in restoring his family's good name.

Oxendine told the press the Waterhouses netted $3 million in premiums from their "scam." According to Waterhouse, the Commissioner was looking at gross receipts without deducting for claims, adjusting fees and his business expenses which included paying premium taxes to the Georgia Insurance Department on a quarterly basis.

Oxendine also said the largest claim the Waterhouses had to pay was $25,000 and their "bogus" operation was exposed when larger claims were made which they couldn't pay, seemingly contradicting his own assertion that the Waterhouses were rolling in dough. "We paid several claims well in excess of that figure," Waterhouse said.

Even though they did all their business in the open from a Main-Street storefront and had faithfully submitted fully-completed reports to Oxendine's office, Waterhouse reiterated his claim that no one in authority had approached him or his son for information or for their records before the highly-publicized events of last March put them out of business.

About the author:

Betty Clermont is a Staff Writer for Atlanta Progressive News and may be reached at betty@atlantaprogressivenews.com

Syndication policy:

This article may be reprinted in full at no cost where Atlanta Progressive News is credited.

ALD said...

I am happy to let your comments stand in my blog, in the interest of equal time. However, I stand by the validity of my original posts on this matter.