Thomas M. Grubb Jr., 58, pleaded guilty to an indictment charging him with one count of conspiracy to commit mail fraud and wire fraud.
He admitted to overcharging for insurance policies and issuing bogus policies to defraud purchasers of commercial liability insurance.
Grubb was arrested on April 14, 2008, and charged by complaint with one count obstruction of justice. He failed to appear in court on Nov. 5, 2008, and a warrant was issued for his arrest. Special agents of IRS-Criminal Investigation apprehended Grubb in Port Charlotte, Florida on Dec. 6, 2011.
Grubb was employed at Aconorate Insurance Agency in Hammonton when the company engaged in a scheme to defraud its clients. Grubb, as well as the owner of the company and an information technology employee at the company, obtained insurance for Aconorate commercial liability insurance clients through an insurance broker in Texas. Many of those clients were bars, restaurants and nightclubs.
Grubb and the company’s owner substantially inflated the premium they charged. They would sometimes increase the quote by about 700 or 800 percent. Between June of 2004 and July of 2006, they collected more than $1 million in premiums for commercial liability insurance procured through GM and kept over $597,000 of the premiums for themselves.
They also created websites and telephone numbers for insurance companies, and set up their own mechanisms to pay claims in oder to create the appearance that the companies issuing the claims were legitimate.
The mail fraud and wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for July 30.