December 28, 2021

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A Florida claims adjuster that authorities called the mastermind behind an extensive property insurance fraud scheme has been sentenced to three years in prison.

Walter Malet, 32, of Orlando, was convicted of pilfering more than $262,559 from Security First Insurance Co. of Florida, according to court records and local news reports. Prosecutors said Malet and 10 others used the insurer’s computer system to reopen claims, issue expense checks to ghost vendors, then close the claims the same day, without supervisory review.

“This case is a shining example of the private sector partnering with the State Attorney’s Office to investigate and successfully prosecute a complex and sophisticated group of thieves,” the state attorney for Volusia County, R.J. Larizza, said in a statement.

Malet and another desk examiner at Security First, Rony Pierre-Louis, added eight vendors to Security First’s expense account in 2018 and 2019, according to the prosecutor’s charging affidavit, filed in Volusia County Circuit Court. The schemers then issued 90 payments to the fake vendors.

Security First discovered the scheme during a routine audit, the affidavit said. The insurer found that payments had been made to the vendors, but no invoices had been submitted. Investigators then determined that the vendors were illegitimate, and had families ties to some of the defendants, the arrest report noted. By reopening and closing the claims in the same day, the Security First computer system did not record them as open claims, which helped avoid supervisory scrutiny, according to the court documents.

But the fraudsters may not have realized that records of the transactions were still available in the system.

Some 85 of the 90 checks were deposited into bank accounts, but Security First was able to stop payment on five checks. The participants also used phone-based payment apps, such as Venmo, Zelle and Square, to transfer proceeds to each other, investigators said.

The investigation also found that one defendant also operated a company that was engaged in other illegal activity, including money laundering, the court documents show. The ring also was able to hack the computer credentials of five other Security First employees, as part of the scheme.

All 11 members of the fraud ring were charged with grand theft. Several defendants have pleaded guilty.

Locke Burt, the chairman and CEO of Security First, said that reducing fraud is the best way to keep premiums and costs to a minimum.

“We want the people of Florida to understand how important these cases are to everyone in Florida and if you see fraud, report fraud,” Burt said in a statement to the news media.

State Department of Financial Service records show that Malet was licensed as an all-lines adjuster but was suspended in March 2020 after he was arrested.

After serving prison time, Malet will be on 12 years of probation, authorities said.

TOPICS FLORIDA FRAUD