Acting Attorney General Robert Lougy and the Office of the Insurance Fraud Prosecutor today announced that a former Essex County insurance agent has been sentenced to six years in prison for submitting hundreds of fraudulent life insurance applications to reap more than $1 million in commission and bonuses from Massachusetts Mutual Life Insurance Company (MassMutual).
Stanley Jerome, 33, of Orange, pleaded guilty to second-degree money laundering and insurance fraud in March. Jerome admitted to paying individuals for their identifying information which he then used to submit bogus life insurance applications to MassMutual to reap sales commissions and bonuses totaling $1,132,675. He was sentenced before Essex County Superior Court Judge Ronald Wigler.
Because most of the applications were for low-income individuals, Jerome provided false employment, salary, and net worth information on the applications. For the applications that were approved, Jerome received an annualized commission. He also received bonuses and other payments in connection with those policies.
To hide his scam, Jerome used some of the money he received to make some premium payments on the policies, but most policies lapsed for non-payment within a few months. To make the fraudulent policies look more legitimate, Jerome offered additional cash payments to individuals who agreed to open bank accounts in their own names and remitted the account access information and cards to him. He used those accounts to submit direct-debit authorization forms to MassMutual authorizing the monthly withdrawal of premiums for those straw accounts.
From August 2013 to January 2015 Jerome transferred several hundred thousand dollars of ill-gotten commission into those accounts to make payments on the insurance premiums.
Acting Insurance Fraud Prosecutor Iu noted that some important cases have started with anonymous tips.
People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.