CFO Tom Gallagher surrounded by children
Volume 2 Number 52
December 26, 2005

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MIAMI MEN CHARGED WITH STEALING $1 MILLION IN MORTGAGE TRANSACTION SCHEME

A Miami man is facing more than four dozen felony charges after surrendering Tuesday to insurance fraud detectives with the Department of Financial Services investigating the theft of nearly $1 million in a 2002 mortgage transaction.  The diversion led to foreclosure of a home and put a title company out of business.  A second man wanted on similar charges is now considered a fugitive.

John S. Walters, 43, is charged with 52 separate counts of money laundering, organized scheme to defraud and first-degree grand theft, and potentially faces more than 700 years in prison if convicted on the charges.  He was booked into the Miami-Dade County Jail, and bond is set at $1 million.  Paul Allen Menzel, 49, is wanted on charges of organized scheme to defraud and first-degree grand theft.

“These individuals’ actions caused serious financial and emotional devastation,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the department.  “What they did is unconscionable and calls for the maximum punishment afforded by law.”

Menzel, a former contract closer employed by Title Company of the South, allegedly diverted an escrow account check of more than $997,000 made out to Butler & Hosch, PA, an Orlando law firm. The check was intended to pay an outstanding mortgage loan for a home on Paloma Drive, but instead Menzel diverted the check to John Walters, the corporate representative of the property seller, A Auto Insurance.  Then, between December 2002 and February 2003, Walters opened a checking account at Ocean Bank in the name of Butler & Hosch Corp – Trust Account, and deposited the stolen check by forging the endorsement.  Detectives said Walters bought a new car, paid personal debts, and had repairs made to his home.  Menzel received more than $37,000 from the proceeds. As a result of the theft, the prior lender foreclosed on the new owner, and Title Company of the South was put out of business.

The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance.  Anyone with information about this case or another possible fraud scheme should call the department's Fraud Fighters Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to a conviction.


 

 

GALLAGHER URGES FLORIDIANS IN HURRICANE-IMPACTED AREAS TO TAKE ADVANTAGE OF SPECIAL TAX RELIEF

With the end of the 2005 tax season fast approaching, Tom Gallagher, Florida’s chief financial officer, encouraged Floridians impacted by this year’s hurricanes to take advantage of tax and time relief measures available. 

“Many hurricane victims are still struggling to repair their homes and rebuild their lives,” said Gallagher.  “We want to get the word out that Floridians who were impacted by, or helped victims of, the 2005 storms may qualify for tax savings or obtain extensions for reporting and payment deadlines.”

The Katrina Emergency Relief Act, effective Sept 23, 2005, postpones deadlines for storm victims to perform many time-sensitive acts until Feb. 28, 2006.  These include filing quarterly federal employment and excise tax returns, corporate estimated tax payments and individual estimated tax payments due to the Internal Revenue Service (IRS). CONTINUED

Both individuals and businesses can also qualify for certain tax deductions if they’ve suffered losses resulting from Hurricanes Katrina, Rita or Wilma.  Floridians who helped or housed evacuees from hurricanes may also qualify for tax relief.

Gallagher said that Floridians may be able to lower their federal taxes by claiming hurricane property losses not covered by insurance.  This is allowed for damage caused by sudden, unexpected or unusual events such as hurricanes.  Victims living in the federally-declared disaster areas can claim these losses on last year’s taxes by filing an amendment to their 2004 return. 

Taxpayers in the entire state of Florida will be eligible for relief if they identify themselves as affected by Hurricane Katrina.

The Hurricane Wilma Emergency Relief Act is awaiting the President’s signature.  Upon the act being signed, taxpayers who identify themselves as victims of Hurricane Wilma will be eligible for relief if they live in the following 20 counties:  Brevard, Broward, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Miami-Dade, Monroe, Okeechobee, Osceola, Palm Beach, Polk, St. Lucie and Sarasota. 

The IRS has requested that any envelopes or correspondence that are subject to these extended deadlines should have either Hurricane Wilma or Hurricane Katrina printed in red on the top of the envelope or tax form to identify them as coming from a hurricane victim. The IRS has set up a special help line for hurricane victims at (866) 562-5227.

Gallagher said that tax breaks are also available for good Samaritans who took in homeless Katrina victims for at least 60 days. You can take an extra $500 exemption for each of your guests, up to a maximum of $2,000.

The Florida Department of Revenue (DOR) announced it will work with filers and companies in areas designated as federally declared disaster areas to extend filing and payment deadlines on a case-by-case basis.  DOR can be contacted at 800-352-3671 between 8 a.m. and 7 p.m.  Links to websites with information on all of these issues can be found at www.MyFloridaCFO.com

 


 

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SOUTH FLORIDA AGENT ARRESTED FOR FRAUD AGAINST SENIORS

Tom Gallagher, Florida’s chief financial officer, today announced that a South Florida insurance agent has been arrested for bilking elderly clients in an unregistered securities scheme.

Thomas A. Masciarelli, 48, was arrested by state insurance fraud detectives, charged with three counts of grand theft and booked into the Palm Beach County Jail.  He allegedly stole some $300,000 from three investors – a 58-year-old woman supporting a disabled adult daughter, an 82-year-old woman with no family, and an 80-year-old man suffering from Parkinson’s disease.   Masciarelli could face up to 60 years in prison if convicted on the charges.  Gallagher has also filed an administrative complaint and is seeking revocation of the agent’s license.

“We will not put up with Florida’s investors - particularly our vulnerable elderly investors - being preyed upon,” said Gallagher, who oversees the Department of Financial Services.  The department conducted the investigation along with the Office of Financial Regulation.  “We will hold this individual accountable for every victim he defrauded and every dime he stole.” 
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Masciarelli would develop strong friendships with seniors to get them to invest and encourage them to recruit other investors.  Fraud detectives said that the 82-year-old woman considered him a son.  Masciarelli also recruited potential investors through civic organizations, including the 80-year-old man he is charged with defrauding.

All three cases were nearly identical:  Masciarelli would sell them fixed annuities from American Investors Life Insurance Company (AILIC) and then later advise that their investments were not doing well.  He would convince them to cash out the AILIC annuities and buy investments purportedly offered through his own company, Palm Beach Financial Services, Inc.  However, detectives said Masciarelli did not invest the funds but instead used the money for personal and other expenses. 

The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance.  Anyone with information about this case or another possible fraud scheme should call the department's Fraud Fighters Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to a conviction.