Former insurance agent pleads guilty to fraud

February 03, 2006|by DAVE McMILLION

CHARLES TOWN, W.Va. - A former longtime insurance agent in Charles Town pleaded guilty Thursday to obtaining money by false pretenses after he allegedly collected more than $50,000 from customers for insurance policies that did not exist.

Victims in the case included the Jefferson County Chamber of Commerce and the Old Opera House. A representative for the Chamber of Commerce read a statement aloud in Jefferson County Circuit Court Thursday afternoon about how many people had placed trust in Michael J. Cross's insurance business.

"He has now brought shame not only to his profession, but his family and friends," said Chuck Ellison, president of the board of directors for the chamber of commerce.


In a plea agreement, Cross, 74, agreed to pay a restitution of $67,652. The money was distributed among seven organizations and individuals who were victimized in the case.

In the restitution, the Old Opera House received $16,487.71, Raymond Biller received $250, Mary and James Smoot, and John Cahalin received $4,932.85, the Chamber of Commerce received $33,612.50 and a local builder received $12,369.17, Jefferson County Assistant Prosecuting Attorney Gina Groh said.

During the plea hearing before Judge David Sanders, Cross apologized to a group of victims who gathered in the courtroom.

Cross said he made mistakes and that he was prepared to pay the consequences.

"I am very sorry. I'm particularly sorry in Mrs. Via's case," said Cross, referring to Mary Via, director of the chamber of commerce.

"I can't tell you how sorry I am," Cross said.

Last year, Via met with investigators in the case about insurance the chamber paid for through Moore Insurance Co., which was at the corner of George and Liberty streets in Charles Town.

Since 1995, the Chamber was paying for a director's and officers liability insurance but Via discovered that the insurance was not in effect, court records said.

It appears that each time insurance payments came due for the Chamber, Cross would issue a binder policy, court records said. Although the Chamber would pay for the binder policy, no packet detailing their coverage was ever sent to them, according to Charles Town Police Department Detective Mark Spessert and court records.

In the case involving the home builder, the client had been paying insurance to Moore Insurance Co. for new homes since 1999, records state.

The home builder thought he had insurance for his new homes through a certain insurance company but it later became evident that the insurance company does not provide builder's risk insurance, according to records.

It was determined that the home builder paid $12,369 to the Moore Insurance Co. for insurance that did not exist, records state.

The Old Opera House paid $16,487 in 2001 and 2002 to the Moore Insurance Agency for insurance that did not exist, said court records.

Under the plea agreement, Cross received a sentence of one to 10 years in prison, but the sentence was suspended and he was given two years of unsupervised probation.

Under the deal, Cross also was required to give up his West Virginia insurance license and pay a fine of $2,500.

Cross, who now lives in Florida, is also to refrain from accepting employment in the insurance field, Groh said.

The Herald-Mail Articles