Commissioner Donelon Granted Motion in Court
Against Insurance Fraud Ring
Insurance Commissioner Jim Donelon of the Louisiana Department of Insurance (LDI) was granted a Motion of Summary Judgment on June 13, 2011 by the Nineteenth Judicial District Court of Louisiana. The judgment was in favor of LDI, Great Southern Dredging, Inc. and Entek Mechanical Corporation and against defendants United Assurance Company, Ltd., AA Communications, Inc., and James Zoucha, Cong Li and Gwen Moyo. The defendants were issued a permanent injunction and required to cease and desist from all insurance activities in Louisiana.
“I’m delighted with the success of this motion, which has proved to be very protective of Louisiana citizens, both at Great Southern Dredging and in St. Tammany Parish,” said Commissioner Donelon on this ruling. “Our intent was to prevent those involved with this insurance fraud ring from harming others in Louisiana. Crime like insurance fraud does not pay.”
In addition to the permanent injunction, the defendants were ordered to make restitution to Great Southern Dredging, Inc. in the amount of $365,555.00, make restitution to Entek Mechanical Corporation in the amount of $187,018.35, pay $19,293.30 in premium taxes and penalties due on premiums received from Great Southern Dredging, put up a $50,000 bond to come into court, pay attorneys’ fees incurred by LDI of $120,577.40, pay fines and penalties of $50,000 and pay all court costs and judicial interest.
Construction Bonds are a type of insurance that pays to complete construction projects if contractors fail to complete the specified job or fail to pay subcontractors. As a word of caution to the public, Commissioner Donelon warns that the only way a political subdivision (or any other owner for that matter) can be certain that a person giving a bid bond, payment bond, and/or performance bond is legitimate is to contact LDI’s Office of Licensing and Compliance and have the staff look up the entity and give the verification needed.
In October, 2008, a New Orleans federal jury found Moyo guilty of 41 counts of fraud, conspiracy and money laundering for selling bogus construction bonds and pocketing approximately $2 million in the process. She was later sentenced to 20 years in prison in April, 2009 and ordered to pay approximately $2.4 million in restitution to three of her victims, including a West Memphis, Arkansas church. Moyo was also convicted in Arizona in 1989 on similar charges. The case was prosecuted by the U.S. Attorney in New Orleans subsequent to a joint investigation by the FBI and the Louisiana Department of Insurance.