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Insurance industry

Kentucky Employment Agency Owner Sentenced to Jail and Fined for Insurance Fraud Scheme

Strategic Insights

— 1 min read

Gary Linsey Slater, the owner and operator of a Kentucky employment agency for coal mines, has been sentenced to 108 months in prison and ordered to pay $5 million for his involvement in a scheme to defraud two workers' compensation insurance companies. Slater's agency, which employed more than 100 miners, had declared to the insurance companies that it employed only 15 people in order to reduce insurance premiums. The agency created two separate companies to avoid detection, and when an employee was injured, Slater's agency would either pay off the injured worker or file a claim in the name of the covered company.

Key Takeaways:

  • Gary Linsey Slater, the owner and operator of a Kentucky employment agency, has been sentenced to 108 months in prison for mail fraud and money laundering.
  • Slater's agency employed more than 100 miners but declared to insurance companies that it employed only 15 people to reduce insurance premiums.
  • The agency created two separate companies, with one employing 10% of the employees and the other with 90%, to avoid detection by insurance companies.
  • When an employee was injured, Slater's agency would either pay off the injured worker or file a claim in the name of the covered company.
  • Slater avoided paying more than $6 million in premiums through the scheme.
  • The investigation that led to the indictment was a joint effort between private and government entities, including officials from Kentucky Employers Mutual and AIG.
  • Federal officers seized numerous assets belonging to Slater, including cash, certificates of deposit, vehicles, airplanes, homes, and other personal assets.

Statistics:

  • 108 months: the prison sentence imposed on Gary Linsey Slater
  • $5 million: the fine imposed on Slater for his involvement in the insurance fraud scheme
  • $6 million: the amount of premiums Slater avoided paying through the scheme
  • over 100: the number of miners employed by Slater's agency
  • 15: the number of employees declared to insurance companies by Slater's agency
  • 2: the number of workers' compensation insurance companies defrauded by Slater's agency (Kentucky Employers Mutual Insurance Co. and American International Group Inc.)
  • 10% and 90%: the proportion of employees in each of the two separate companies created by Slater's agency

Sources:

  • A. M. Best Company, Inc., "Kentucky Employment Agency Owner Sentenced to Jail and Fined for Insurance Fraud Scheme," January 13, 2006 (via COMTEX)

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