Attorney General Gurbir S. Grewal and the Office of the Insurance Fraud Prosecutor announced that a Monmouth County insurance agent and his father pleaded guilty to engaging in a scheme that provided insurance applicants with free life insurance and caused various insurance companies to disburse more than $4 million in fraudulent commissions.
Officials said Frank Pescatore, 73, of Asbury Park, pleaded guilty to second-degree insurance fraud and his son, Evan Pescatore, 38, of Highlands, pleaded guilty to third-degree insurance fraud today before Superior Court Judge Lourdes Lucas in Monmouth County.
Under a plea agreement, the State will recommend that Frank Pescatore be sentenced as a third-degree offender to a three-year prison term.
The State will recommend that Evan Pescatore be sentenced to a term of non-custodial probation under the terms of his plea agreement. Sentencings are scheduled for February 1, 2021.
“Using fraud and deceit to obtain payouts from insurance companies is a crime that undermines the integrity of the insurance industry and drives up costs for everyone,” said Attorney General Grewal. “We will continue to pursue these cases to bring violators to justice and send a message of deterrence to the public.
In pleading guilty, the two men admitted to defrauding insurance companies in a scheme to provide high-value life insurance policies at no cost to applicants in order to obtain commissions from the insurance companies.
Eighteen policies – with face values totaling $61.5 million – were caused to be issued by eight insurance companies in the scheme.
This process of providing applicants/insureds with an inducement to apply for life insurance policies by paying their premiums, known as “rebating,” is prohibited by the insurance industry as well as state law.
“Rebating fraud violates the legitimate purpose of insurance by providing benefits to individuals through fraudulent and ill-gotten commissions, rebates, and free short-term insurance,” said Acting Insurance Fraud Prosecutor Tracy M. Thompson. “The financial losses suffered by insurance carriers are passed on to honest policy holders in the form of higher premiums. My office is committed to investigating and putting a stop to this kind of criminal enterprise.”
Deputy Attorney General Jennifer L. Menjivar represented the State in the plea hearings. Detectives Natalie Brotherston, Taryn Seidner, and Matthew Armstrong coordinated the investigation with assistance from analyst Kelly Celenza.
Acting Insurance Fraud Prosecutor Thompson noted that important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about 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.