Checks totaling $6.5 million have been mailed to hundreds of former members of Phoenix Fund Inc., a self-insured group workers’ compensation fund, who were victims of reinsurance fraud, the North Carolina Department of Insurance said.
Insurance Commissioner Wayne Goodwin said Monday, August 10, that the $6.5 million has been distributed to 661 former members of the San Antonio-based workers’ comp fund.
Phoenix Fund has been under rehabilitation since October 2006, the result of the North Carolina Insurance Department uncovering a $20 million scheme that left several insurance entities, including the Phoenix Fund, without reinsurance.
The state agency said it has recovered nearly $18 million for the Phoenix Fund from Thomas G. Reitz, whom the department described as the “purported insurance broker” for Phoenix Fund.
Reitz pleaded guilty in 2007 to charges of mail fraud and money laundering. In 2008, he was sentenced to 70 months in prison and ordered to pay more than $19 million in restitution to the Phoenix Fund.
Distribution checks were mailed to members participating in the Phoenix Fund as of October 17, 2006, according to the North Carolina agency.
Filed by Jeff Casale of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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