US$1 Million Fraud By Insurance Broker

A New York state insurance broker has been arrested and charged with wire fraud, attempted wire fraud and aggravated identity theft and is facing a maximum penalty of 20 years in prison.

U.S. Attorney James P. Kennedy Jr. announced the charges against Brian Bartz, 38, of Rochester, N.Y. Bartz has been employed as an insurance broker by several different life insurance companies, including the Benjamin Hollamby Agency, which sold life insurance policies on behalf of Nationwide Life Insurance Company, the Banker’s Conseco Life Insurance Company, Mass Mutual Life Insurance Company and the Lavoro Group via Mass Mutual, located in Rochester. The general practice of these companies was to offer monetary commissions and/or bonuses to their agents when agents sold life insurance policies.

According to the complaint, Bartz would submit false applications for life insurance policies to the insurance companies on behalf of individuals who were not aware of these applications. The applications included individuals’ means of identification without their knowledge or consent.

In order to avoid detection, he used various victims’ bank accounts to pay the premiums for the unauthorized policies. Between 2015 and 2020, Bartz defrauded or attempted to defraud a number of life insurance companies and dozens of investors out of more than $950,000.

In addition to defrauding insurance companies, Bartz attempted to defraud individual victims through a fraud scheme commonly known as a Ponzi scheme. The defendant targeted individuals that he either already had years-long relationships with as their life insurance agent or who were referred to Bartz as a life insurance/investment agent.

While working at the life insurance companies, Bartz began to persuade individuals to make premium payments to him directly instead of to the life insurance company with which they had or believed they had a policy.

In addition, Bartz represented himself as an investment advisor and convinced victims to invest their money in investment funds that he controlled, which did not exist. To avoid being detected, he used a small portion of incoming new investor money to make promised payments to earlier investors. Bartz is accused of defrauding individual investors out of approximately $530,000.