“Today's guilty pleas show that the Office of the Insurance Fraud Prosecutor continues to make the investigation and prosecution of corrupt insurance brokers a top priority,” Acting Insurance Fraud Prosecutor Ronald Chillemi said.

The defendants were the managing directors of Arden Financial Services, Inc., located in Far Hills Borough, New Jersey. The company specialized in the sale of management liability insurance.

In pleading guilty, Mr. Mohen admitted that between February 28, 2007 and June 7, 2010, he was responsible for the misappropriation of approximately $770,768. Ms. Stanko-Mohen admitted that she was responsible for the misappropriation of more than $1,000. An investigation by the New Jersey Office of the Insurance Fraud Prosecutor determined that the defendants had misappropriated the money by failing to remit premiums they received to seven companies – Indian Harbor Insurance Company ($300,900), Great American Insurance Company ($128,694), Catlin Specialty Insurance Company ($123,250), XL Specialty ($89,250), Navigators Insurance Company ($71,823), The Camden Fire Insurance Association ($52,650), and Greenwich Insurance Company ($4,200).

Prosecutors said that New Jersey law and Arden's producer agreement with the insurance companies established a fiduciary relationship between Arden and the insurance companies with which Arden was doing business and required Arden to hold all insurance premiums it received in a segregated trust account. The commingling of premiums with any other funds or the misappropriation or conversion of premiums to Arden's or the defendants' own use was expressly prohibited by New Jersey law.

The investigation determined that the defendants commingled trust account funds with office funds, failed to remit premiums due and owing to those insurance companies, and misappropriated premiums for their own purposes.

Once the defendants' fraudulent actions were discovered, the insurance companies made good on the policies, so that the policyholders did not lose coverage, prosecutors said.

The defendants also admitted that they failed to file an income tax return for the tax years ending 2008 and 2009. The investigation determined that they subsequently failed to pay $49,900 in income tax for 2008 and $21,969 in income tax for 2009.