Ellicott City broker pleads guilty in insurance scam

March 31, 1992|By Thomas Easton | Thomas Easton,New York Bureau

NEW YORK -- One of three Maryland defendants in what is alleged to be a multimillion-dollar insurance scam pleaded guilty yesterday in New Jersey to conspiracy and mail fraud, and agreed to cooperate with prosecutors.

Warren Berkle Jr., a 42-year-old Ellicott City insurance broker, admitted to participating in a conspiracy to sell worthless insurance policies, prosecutors said.

Martin Bramson and Leonard Bramson of Columbia, and Kent W. Conshafter of upstate New York have also been indicted in the case.

In a separate case, Mr. Berkle admitted selling a fraudulent construction performance bond.

Mr. Berkle faces up to 15 years in prison and $750,000 in fines. No sentencing date has been set.

"The evidence against the defendant was overwhelming," Assistant U.S. Attorney Kimberly McFadden said. Mr. Berkle's attorney, E. Nicholson Gault, declined to comment pending sentencing.

The scope of the insurance fraud remains unclear because records recovered by the government may be incomplete, Ms. McFadden said.

Prosecutors said that policies were sold and premiums collected without necessary approval from New Jersey insurance authorities and that a company acquired by the defendants in 1989, Preferred Indemnity Insurance Co., used false records in dodging regulators' orders to cease doing business.

About 800 policies were sold to members of the National Association of Home Inspectors, and a claim on a fraudulent policy has been filed by an elevator company in connection with the accidental fall of 6-year-old child down an elevator shaft in Brooklyn, N.Y.

Only four of the policies issued by New Jersey-based Preferred Indemnity were sold by Mr. Berkle, Ms. McFadden said.

Mr. Berkle and the Bramson brothers were indicted in September. Mr. Conshafter and B. Scott Smith of Colorado were indicted in November.

Martin Bramson failed to appear at a pretrial hearing in October and is a fugitive. "He'll be tried as soon as he is found," Ms. McFadden said.

Leonard Bramson was jailed last month in New Jersey after evidence emerged that he was attempting to transfer money abroad and might flee, prosecutors said.

All of the defendants face scores of years in jail and millions of dollars in potential fines. Trial dates for this case and a related one involving Mr. Smith have been scheduled for April and May, but Leonard Bramson's attorney, David Steingold, said he might request a postponement in light of Mr. Berkle's plea.

"Having prepared for the last six months assuming that Mr. Berkle was on my side . . . it presents a real problem," Mr. Steingold said. "I would have to go over reams and reams full of documents . . . . Obviously, it won't be possible between now and next week.

"The proof will show Leonard has no involvement whatsoever in the alleged acts of wrongdoing. Leonard was basically someone who opened bank accounts and lent his name as treasurer. In terms of his role in the everyday operations of the company, it was virtually nonexistent."

Other attorneys could not be reached last night.

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