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Former Keys Insurance Agent Sentenced to Six Years in Premium Scam

3/7/2002

TALLAHASSEE - A former Monroe County insurance agent was sentenced today to six years in prison after pleading to charges that he defrauded a string of businesses throughout the Florida Keys, leaving many consumers uninsured just months before the start of the 1998 hurricane season. The case was investigated by the Florida Department of Insurance, Division of Insurance Fraud, and prosecuted by the Office of Statewide Prosecution and the Sixteenth Circuit State Attorney's Office.

Insurance Commissioner Tom Gallagher and Statewide Prosecutor Melanie Ann Hines said today that Charles Cafiero, 48, formerly of Tavernier, pleaded no contest to racketeering, conspiracy to commit racketeering, and four counts of organized scheme to defraud. In addition to the prison time, Cafiero was also sentenced to 10 years probation and was ordered to pay back $915,000 in restitution by Circuit Judge William Ptomey, Jr. Charles Cafiero will also be permanently banned from selling or transacting insurance in Florida.

Cafiero, whose former agency Cafiero Insurance was located in Key Largo, bilked various insurance consumers, brokers and premium finance companies for more than $1 million. Fraud investigators determined Cafiero used the stolen premiums to purchase controlling interest in the Quay Restaurant in Key Largo.

Cafiero shut down his agency in 1998. Many business owners, after finding their insurance coverage cancelled, had to rush to renew coverage just months before the start of the 1998 hurricane season that included hits to the Keys by Hurricanes Georges and Irene.

The Department began receiving complaints in February 1998 from numerous business owners who suspected Cafiero had taken their premiums but had not initiated coverage. Investigators discovered that Cafiero was operating a large-scale "Ponzi" scheme involving various tactics, including financing the premiums of numerous customers without their permission. In some cases, customers paid their premiums in full or entered into legitimate finance arrangements with Cafiero only to discover that he had prepared and cashed finance drafts from other finance companies without their knowledge or permission.