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Insurance Commissioner John Garamendi Announces Indictment of Eight Owners of a Massachusetts-Based Company on 50 Felony Insurance Fraud Charges Resulting from a $60,000 Statewide Bicycle Courier Scheme

5/31/06, Sacramento, CA – Insurance Commissioner John Garamendi today announced the indictment of eight Massachusetts residents for insurance premium fraud charges. The eight owners and employees of Massachusetts-based National Independent Contractors Association (NICA) face arraignment today on 50 felony insurance fraud charges after being indicted by a San Diego County grand jury on April 3, 2006.

The eight defendants are scheduled to be arraigned this afternoon in San Diego Superior Court. The San Diego County District Attorney’s office is prosecuting this case. Defendants Thomas M. McGrath, 44; Eileen Rogantino, 42; Wesley McClure, 46; Daniel M. Curran, 53; Mary Jayne Graham, 51; Timothy F. Bergin, 36; Andrew Rogantino, 46; and David B. Kenyon, 58, are charged with one count of conspiracy to commit premium fraud; six counts of premium fraud; and 43 counts of filing false injury claims in a scheme totaling more than $600,000 in losses from the San Diego District Office of State Compensation Insurance Fund (SCIF). If convicted of all charges, the defendants face up to 59 years in prison and a fine of $1.2 million.

NICA is a privately owned company founded by Thomas McGrath in the state of Massachusetts. It was incorporated in 1995 and hailed itself as an alliance of independent contractors. NICA does business throughout the country and contracts with courier, messenger and delivery service companies in order to convert their employees into independent contractors.

On October 2002, defendants McGrath and Rogantino, officers of NICA, contacted a San Diego County insurance broker to apply for and receive a workers’ compensation insurance policy from the San Diego District Office of SCIF. Over the course of the next year, NICA reported 47 claims for injured workers whom in fact were injured, however not all 47 workers were employed with NICA. In actuality, NICA employed only a few of the 47 employees. These workers’ comp claims involved bicycle, motorcycle and motor vehicle couriers.

“This company prided itself on malpractice. Not only did the company file bogus worker’s comp claims, but they also ripped off SCIF by making SCIF pay out $600,000 in losses,” said Insurance Commissioner John Garamendi. “This type of fraud is deplorable and clearly illustrates the peril that we all face because of some people’s unscrupulous and illegal actions.”

The California Department of Insurance assisted in this investigation and worked with the Massachusetts State Police in obtaining and serving a search warrant for the office of NICA.

“This major investigation was successful because of tremendous help from the California Department of Insurance, with assistance from the Employment Development Department and the State Compensation Insurance Fund,” said District Attorney Bonnie Dumanis.

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