Ontario wholesale broker pleads guilty in connection with US$8.5-million scam

Canadian wholesale broker Ian Stuart-Smith has pled guilty to a felony wire fraud charge and now faces a maximum of 20 years in jail and a maximum fine of US$250,000 or twice the gross gain or loss resulting from the crime. Stuart-Smith (who has gone by many aliases according to New York authorities, including Ian Stuart and John Harrington) pleaded guilty in a Manhattan federal court to a charge in connection with a scheme in which Stuart was accused of persuading insurance agents in Canada and the United States to purchase more than US$8.5-million worth of fraudulently issued commercial liability insurance policies. According to the guilty plea and indcitment of the U.S. Attorney for the Southern District of New York, Stuart presented himself to brokers in New York as a wholesale insurance broker able to place insurance coverage despite not being registered to do so as is required in the State of New York.In placing this insurance, Stuart-Smith used company names as Surplus Lines, Inc., Heritage, Inc., Heritage International, Inc., Heritage Agency, Inc., Rupertsland Insurance Intermediaries, Ltd., Rupertsland Intermediaries, Ltd. and Rupersland, located in New York City and Toronto. Stuart-Smith also claimed to be an authorized agent for such insurance companies and entities as Lloyds of London, Colony Insurance, Essex Insurance and Indian Harbor, among others. According to a press release from the attorney generals office announcing the guilty plea, Stuart collected for himself the premium payments for the bogus commercial liability policies he falsely claimed he had placed with various insurance companies and entities, and created fictitious documents purporting to confirm the existence of insurance coverage as part of the scheme.His sentence date is scheduled for September 17.