United States Attorney Glenn T. Suddaby announced today that an indictment has been filed against an Oriskany couple on charges related to their insurance business.
JAMES M. KERNAN, 59, and his wife, MARLENE M. KERNAN, 58, who reside in Oriskany, New York were named as defendants in a superseding indictment returned by a federal grand jury in Syracuse on July 31. JAMES KERNAN is the president of Oriska Insurance Company and MARLENE KERNAN is the President of Monument Agency, Inc. Both companies have offices located at 1310 Utica Street, Oriskany. JAMES KERNAN is charged in one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349; five counts of mail fraud, in violation of Title 18, United States Code, Section 1341; and five counts of wire fraud, in violation of Title 18, United States Code, Section 1343. The indictment alleges that JAMES KERNAN defrauded several professional employer organizations (PEOs) located in New York, California, Arizona and Pennsylvania by marketing to these PEOs unlawful and invalid workers compensation insurance policies issued by Oriska Insurance Company. The indictment alleges that these policies were written to cover workers in states where Oriska Insurance Company was not licensed or authorized to provide workers compensation insurance. In addition it is alleged that the policies provided to the PEOs provided for deductible amounts which Oriska was not authorized to include in their policies. The maximum penalty for the conspiracy count is ten years imprisonment and a $250,000 fine. Each mail and wire fraud count is punishable by a maximum of twenty years imprisonment and a $250,000 fine.
JAMES KERNAN is also charged with making a false statement to a representative of the New York State Insurance Department by mischaracterizing the reason why Oriska Insurance Company paid off the balance of an automobile lease in the amount of $39,841.54. The indictment alleges that KERNAN reported that the payment was made so that he could have transportation available to him when he was in the New York City metropolitan area, when in fact the payment was compensation for another person in exchange for services provided to Oriska Insurance Company.
JAMES KERNAN is also charged with making a false statement to the New York State Insurance Department when, as President of Oriska Insurance Company, he signed the “Annual Statement for the Year Ended December 31, 2002 of the Condition and Affairs of the Oriska Insurance Company”, which over reported the amount of workers compensation insurance premiums written by Oriska Insurance
Company in 2002. Both of these offenses are punishable by a
maximum of ten years imprisonment and a $250,000 fine.
Both JAMES KERNAN and MARLENE KERNAN are charged with permitting a convicted felon to be engaged in the business of insurance in violation of Title 18, United States Code, Section 1033. The indictment alleges that the defendants permitted Robert J. Anderson to be engaged in insurance business with Oriska Insurance Company and Monument Agency, Inc. from December 2001 through July 2005. Anderson had previously been convicted of several felonies in California during 1988 through 1996. These counts are punishable by a maximum of five years imprisonment and a fine of $250,000.
Robert J. Anderson was originally charged with JAMES KERNAN in a prior indictment in connection with the mail and wire fraud schemes. Anderson pled guilty in federal court on July 14, 2008 to conspiracy to commit mail and wire fraud as well as being a convicted felon engaged in the business of insurance. Sentencing for Anderson is scheduled for November 25, 2008.
Both JAMES KERNAN and MARLENE KERNAN are released on their own recognizance. Currently trial is scheduled to begin October 6, 2008 before Senior United States District Court Judge Frederick J. Scullin, Jr. in Syracuse.
The case was investigated by the Federal Bureau of Investigation, the New York State Insurance Frauds Bureau and the Oriskany Police Department. The prosecution is being handled by Assistant U.S. Attorney Edward R. Broton.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty. |
