Collision Shop Employee Sentenced to Jail After $220K Insurance Scam

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Feb 24, 2022  According to an article by Insurance Business Magazine, a Rhode Island woman is headed to federal prison for stealing insurance payments meant for a collision repair shop's customers.

Idalee Johnston, 48, who worked at the shop as an office secretary, stole nearly 200 checks sent to customers by their insurance companies for vehicle repairs, the U.S. Department of Justice said. Johnston pleaded guilty to mail fraud and has been sentenced to two years in prison.

Beginning in 2016, Johnston used two methods to steal customers’ insurance payments. At times, she'd neglect to have customers sign direct-payment forms that would have sent payments directly to the body shop. In other cases where customers did sign the forms, she'd neglect to forward the paperwork to the insurance companies. As a result, insurance checks meant to pay for repairs were sent to customers, who then gave the checks to Johnston to ensure the repairs were completed.

Johnston admitted in court that she deposited some of these checks into her own bank account, while other stolen checks were given to family members to be deposited into their bank accounts. The practice continued for two years and resulted in a loss to the auto body shop of more than $220,000.

After completion of her two-year prison term, Johnston must serve two years of supervised release. She's also been ordered to pay back $220,083 to the owner of the shop.

https://www.insurancebusinessmag.com/us/news/breaking-news/secretary-headed-to-jail-after-220k-insurance-scam-326209.aspx

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