According to the North Carolina Department of Insurance, checks worth a total of $6.5 million have been sent to hundreds of former members of Phoenix Fund Inc., a self-insured group workers’ compensation fund, that were victims of reinsurance fraud.
On August 10, Insurance Commission Wayne Goodwin said that the $6.5 million had been distributed to 661 former members of the workers’ comp fund, which is based out of San Antonio, Texas.
Since October 2006, Phoenix Fund has been under rehabilitation due to the North Carolina Insurance Department discovering a $20 million scheme which resulted in several insurance entities, which includes Phoenix Fund, without reinsurance.
According to the Department of Insurance, the state agency has recovered nearly $18 million for the Phoenix Fund from Thomas G. Reitz, which the agency described as Phoenix Fund’s “purported insurance broker.”
In 2007, Reitz pleaded guilty to mail fraud and money laundering charges. He was sentenced to more than 70 months in prison in 2008 in addition to being ordered to pay more than $19 million in restitution to the Phoenix Fund.
The agency said that distribution checks were sent to members participating in the Phoenix Fund as of October 17, 2006.