Friday, October 30, 2020

Georgia Gov. Calls on Beck to Resign as Insurance Commissioner After Indictment

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Georgia Governor Brian Kemp has asked embattled Insurance Commissioner Jim Beck to resign from his post, effective immediately, saying his recent indictment “severely undermines your ability to fulfill your obligations to the people of Georgia.”

In a letter sent to Beck on May 15, a day after Beck was served with the 38-count indictment from a federal grand jury, Kemp said he was respectfully requesting his resignation as Commissioner of the Georgia Department of Insurance.

Beck is accused of defrauding the Georgia Underwriting Authority (GUA), the state’s high-risk property insurer to Georgia homeowners while serving as general manager of operations. GUA is funded by premiums collected from its customers and assessments of members, including every insurer writing property insurance in Georgia. It is governed by a board of governors, appointed by the Georgia Commissioner of Insurance and other members elected from a slate of candidates by the Georgia Commissioner of Insurance.

Beck is accused of committing 12 counts of wire fraud, 12 counts of mail fraud, and 14 counts of money laundering in a scheme that is alleged to have gone on between February 2013 and June 2018, before he became the Georgia insurance commissioner.

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Kemp said as insurance commissioner, Beck holds “significant legal authority – including appointment powers – over GUA and its governing board.”

“In light of this connection and the possibility of new revelations, it would be highly inappropriate for you to continue to hold public office,” Kemp wrote. “I ask that you do what is right for our state and step down immediately.”

Beck maintains his innocence against the charges in the grand jury indictment, saying in a statement through his lawyer Bill Thomas to the Associated Press that he “strongly denies” the allegations.

According to the indictment, while in his position at the GUA, Beck formed and had a controlling financial interest in two businesses in Carrollton – Creative Consultants and GA Christian Coalition.

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U.S. Attorney Bjay Pak said during a press conference May 14 that Beck convinced four of his associates to create four different businesses with the alleged purpose of supplying the [GUA] with services, such as residential property inspection and water damage mitigation.

“However, through an elaborate system of invoicing … which included producing false documentation, Beck regularly approved substantial Georgia Underwriting Association payments to the four newly formed companies that were formed by his associates,” Pay said.

Beck then allegedly sent fraudulent invoices from the businesses he had control over – Creative Consultants and the GA Christian Coalition – to the four companies and then directed his four associates to pay the fraudulent invoices from a portion of the money paid to their businesses by the GUA, the indictment alleges.

Beck then allegedly used the proceeds for personal expenses such as credit cards and retirement accounts, as well as state and federal personal income taxes. Prosecutors said Beck also made payments to his campaign for insurance commissioner and used proceeds for the purchase and improvement of personal rental property.

Special Agent in charge of the FBI in Atlanta Chris Acker said the investigation began about 10 months ago because of allegations referred to the FBI by Georgia Inspector General Deb Wallace.

“The investigation quickly developed [and] evidence established that Beck abused the trust of friends and his employer GUA in an elaborate scheme to enrich himself at GUA’s expense,” Acker said.

Beck’s attorney told AP that Beck “acted legally and in good faith,” and that he “looks forward to clearing his good name.”

According to the Atlanta Journal Constitution, “the governor cannot unilaterally oust Beck. Under state law, if Beck doesn’t resign or ask to be suspended after a 14-day period, Kemp can appoint a panel to decide whether the commissioner should be suspended.”

Beck appeared to show no sign of stepping aside because of the charges when the news of the indictment first broke Tuesday.

In a statement to Insurance Journal on Tuesday, a spokesman for the Georgia Department of Insurance said: “The accusations that have been made against Commissioner Beck today have no bearing on his service as an elected official to the people of Georgia. [Beck] is entitled to the same presumption of innocence that every citizen of Georgia walks into a courtroom with when accused of a crime. The Department is focused on fulfilling the vital mission we have to protect Georgia consumers. The incredible employees of our Department will get up tomorrow morning and go back to work, including Commissioner Beck.”

Beck was ordered to report to federal authorities Wednesday. He arrived at a Georgia federal court in the morning, according to local media outlets, and granted $25,000 cash bond. The judge said the commissioner can’t travel out of state without permission and must recuse himself from any dealings with the GUA, the Atlanta Journal Constitution reported.

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