Florida CFO Atwater’s Department Wins $76 Million Judgment Against Former Aries Insurance Company Owners
Contact: Alexis Lambert
TALLAHASSEE—Florida CFO Jeff Atwater announced today that a judgment has been entered against the former owners of Aries Insurance Company, Inc. for more than $76 million. The insolvency of Aries Insurance Company left approximately 58,000 policyholders and creditors with unpaid claims when it was ordered into receivership in 2002 and two state guaranty funds were triggered to pay those claims.
The Florida Insurance Guaranty Association and the Florida Workers’ Compensation Insurance Guaranty Association have paid more than $165 million to Aries claimants so far – and that figure is expected to top more than $170 million when all claims are resolved. The judgment, handed down last week by the Complex Litigation Division of the Miami-Dade Circuit Court, follows an extensive investigation by the Department of Financial Services (Department) that determined that Marcos Fraynd and his children, Paul Fraynd, Saul Fraynd and Fanny Fraynd, diverted company funds for personal use.
“This order affirms that financial crimes against our hard-working Florida citizens will not be tolerated,” said CFO Atwater. “My Department will aggressively pursue anyone who schemes to line their own pockets through fraud and deception.”
In 2006, the Department sued the former owners and directors of Aries for diverting policyholder premium money and making illegal distributions of Aries’ assets for their personal benefit. The Department has already recovered over $20 million from other involved parties through previous lawsuits and intends to pursue the most recent judgment until the full amount is paid. Money collected from this judgment will help offset possible assessments of Florida policyholders for future insurance company insolvencies.
On May 21, 2007, the Fraynds pleaded guilty to diversion of premiums and received various sentences, including restitution, for their roles. The April 13, 2011, judgment of $76 million is just another result of steps by the Department to recover enormous losses caused by the diversion of premium and other illegal acts by the former owners and directors of Aries.
For more information, visit the Department’s website at www.MyFloridaCFO.com
. Chief Financial Officer Jeff Atwater, a statewide elected official and officer of the Florida Cabinet, oversees the Department of Financial Services including the Division of Insurance Fraud. CFO Atwater’s priorities include fighting financial fraud, abuse and waste in government, reducing government spending and regulatory burdens that chase away businesses, and providing transparency and accountability in spending.