A Yakima man is being charged with theft after investigators say he made up a fake business owner and six fake businesses to obtain $2.8 million in loans from a Spokane company.
Edward J. Chadwick, a former insurance producer, was recently charged with theft after investigators from the Office of the Insurance Commissioner alleged he had fraudulently obtained 24 insurance premium loans from a Spokane company, Tepco, between April 2016 and July 2018.
Kara Klotz, a spokesperson for the insurance commissioner’s office said this type of theft and fraud isn’t common, especially in this amount. Normally, a private company will ask their insurance agent to find an insurance finance company that they can borrow money from to pay for property and casualty insurance instead of paying for a year’s premium in full. The private company normally pays back the insurance finance company in installments. Chadwick is accused of approaching the Spokane company on behalf of a fake business owner named Mike King, who owned six businesses, and on behalf of a client he no longer represented.
Tepco notified the Insurance Commissioner’s office of the loans in December 2018, and Chadwick’s license was revoked in February. Chadwick challenged his license’s suspension and it wasn’t officially revoked until September.
Chadwick has previously run afoul of the insurance commission. In 2012 he was fined $1,000 for offering free airfare and hotel accommodations to prospective clients, which is illegal under state law. State law at the time only allowed incentives under $25. That restriction has since been changed to $100. According to the report from the insurance commission, when Chadwick was told his offer was illegal, he rescinded it, but several clients had already accepted.
Chadwick’s arraignment for theft is scheduled for February. He has since paid back $1.9 million, including interest. Almost $900,000 is still owed.
Editor’s note: This story was changed on March 29,2019 to reflect that in 2012, it was unlawful to offer insurance incentives more than $25. That regulation has since been increased to $100.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.