MONMOUTH COUNTY – A Monmouth County insurance agent and his father have pleaded guilty to organizing a criminal plan that gave insurance applicants free life insurance and made numerous insurance companies distribute more than $4 million of fraudulent profit.
Frank Pescatore, 73, of Asbury Park, and his son Evan Pescatore, 38, of Highlands, admitted to defrauding insurance companies in a plan to provide life insurance policies at no cost to applicants in order to obtain commissions from the insurance companies. With face values totaling to $61.5 million, the 18 policies were caused to be issued by eight insurance companies in this plan.
“Using fraud and deceit to obtain payouts from insurance companies is a crime that undermines the integrity of the insurance industry and drives up costs for everyone,” said Attorney General Grewal. “We will continue to pursue these cases to bring violators to justice and send a message of deterrence to the public.
It is prohibited by the insurance industry as well as state law to provide applicants with an inducement to apply for life insurance policies by paying their premiums. This process is also known as “rebating.”
“Rebating fraud violates the legitimate purpose of insurance by providing benefits to individuals through fraudulent and ill-gotten commissions, rebates, and free short-term insurance,” said Acting Insurance Fraud Prosecutor Tracy M. Thompson. “The financial losses suffered by insurance carriers are passed on to honest policy holders in the form of higher premiums. My office is committed to investigating and putting a stop to this kind of criminal enterprise.”
Frank pleaded guilty to second-degree insurance fraud and his son Evan pleaded guilty to third-degree insurance fraud.
According to the plea agreement, the State will recommend that Frank be sentenced as a third-degree offender to a three-year prison term. The State will also recommend that Evan be sentenced to a term of non-custodial probation under the terms of his plea agreement. Sentencings are scheduled for February 1.
