Glenn R. Fischer, age 70, of Ellicott City, Maryland, has pleaded guilty to wire fraud and aggravated identity theft arising from a scheme to defraud businesses seeking insurance.
Fischer admitted that he fraudulently collected more than $4.4 million in insurance premiums that he did not remit to an insurance company, causing losses to the victims who thought they were insured.
According to his plea agreement, from 2002 to about 2014, Fischer was a partner at TriArc Financial Services, Inc., which provided automotive and mortgage insurance products, including residual value insurance (“RVI”). RVI helped companies leasing vehicles to consumers to manage the risk from decreases in the value of the vehicle during the term of an auto lease. RVI typically provided for payments to the owner of a leased vehicle if the value of the vehicle at the end of the lease was less than a certain amount specified in the terms of the insurance coverage when the lease began. In the early 2000s, RVI policies were widely issued by insurance companies and TriArc Services generated substantial revenue for the company and its partners, including Fischer, who served as insurance brokers for RVI products. In 2008 and 2009, in conjunction with the financial recession and changes in consumers' desires for used automobiles, many insureds suffered substantial losses under RVI insurance policies.
Fischer admitted that from 2009 until 2014, he persuaded victim businesses to purchase RVI insurance coverage, which Fischer knew did not exist, so that Fischer could use a substantial portion of the victims' insurance premiums for his personal benefit. Specifically, in the summer of 2009, Fischer created a Nevada corporation called TriArc Marketing Solutions and opened bank accounts for TriArc Solutions. During the course of the scheme, Fischer caused prospective insureds to believe that he was authorized to issue RVI policies on behalf of TriArc Services, a multinational property and casualty insurance company specializing in coverage for small to medium sized businesses, and one of that business' subsidiaries. Fischer also concealed the creation and use of TriArc Solutions from his partners at TriArc Services, according to the government.
Fischer created and sent false insurance coverage documents, fraudulent emails, premium invoices, lists of covered vehicles, and other documents to victim companies, causing them to falsely believe that they had purchased RVI insurance through Fischer. Fischer used the identity of an employee of a multinational property and casualty insurance company in furtherance of the fraud, including his name, title, and purported signature on the declaration pages of the fake insurance policies. Fischer concealed from the employee and the company that Fischer was pretending to issue RVI insurance policies on behalf of the company, prosecutors said.
Fischer collected more than $4.4 million in RVI insurance premiums from the victims, which he deposited into the TriArc Solutions bank accounts. Fischer and his relatives used the proceeds of the insurance premium payments for their personal benefit.
Fischer also admitted that he failed to report a significant portion of the money he obtained from the fraud on his annual tax returns for the 2009 through 2014 calendar years. The total income Fischer received but did not report to the IRS for these tax years exceeded $3.3 million, which generated a substantial tax loss to the United States, the government said.
As part of his plea agreement, Fischer will be required to forfeit all property constituting, derived from, or traceable to the proceeds of the fraud, including, but not limited to $4.4 million.
Fischer faces a maximum penalty of 20 years in prison for wire fraud, and a mandatory two years in prison, consecutive to any other sentence imposed, for aggravated identity theft. U.S. District Judge George L. Russell has scheduled sentencing for June 9, 2017, at 11:00 a.m.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].