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Insurance Agent Charged with Organized Fraud

7/24/2001

TALLAHASSEE – A South Florida insurance agent has been charged with organized fraud for allegedly stealing retirement funds that clients intended to invest in annuities. The funds were diverted to a company that had been dissolved since 1994.

Florida Treasurer and Insurance Commissioner Tom Gallagher said Department of Insurance fraud investigators arrested Augustus Johnson III, 44, of 3005 Bent Pine Drive, Fort Pierce, on Monday and booked him into the St. Lucie County Jail. Bond was set at $25,000. If convicted on the first-degree felony charge, Johnson faces up to 30 years in prison in addition to fines and restitution.

Investigators said that instead of purchasing legitimate annuities from life insurance companies, Johnson put more than $100,000 of the investors' funds into Diversified Financial Services, formerly located at 1985 31st Ave., in Vero Beach. Diversified Financial Services was administratively dissolved by the Department of State in 1994.

Some customers continued to receive monthly statements as late as May 2000 from Diversified indicating that their investments were continuing to accrue value at 7-percent interest. When the statements stopped, they notified the department of their concerns. The three victims identified so far are from Port St. Lucie, Orlando, and Ft. Pierce.

Diversified was owned by Julius Sihombing. Johnson was the primary employee. Sihombing is thought to be in Egypt and is sought for questioning.

The Department of Insurance, 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 Hotline at 1-800-378-0445. A reward of up to $25,000 is offered for information leading to a conviction.