Employees accused of fraud

3 MTA

False vehicle theft reports are alleged

August 10, 2006|By MATTHEW DOLAN | MATTHEW DOLAN,SUN REPORTER

Two Maryland Transit Administration police officers and a bus driver falsely reported their cars stolen, had them set on fire and collected the insurance money, according to a federal fraud indictment unsealed in Baltimore yesterday.

Officer James Walthall, 40, of Randallstown has been charged in U.S. District Court with mail fraud and use of fire to commit mail fraud in connection with the alleged arson and insurance fraud scheme. He appeared in court yesterday afternoon and was released pending his next court date.

If convicted, Walthall could receive a maximum penalty of life in prison.

Driver Lucretia Westbrook was charged in October and Officer Ronald Lurz was charged in March. Both are 35 and from Baltimore and face similar charges. Prosecutors did not disclose their arrests publicly until yesterday.

The seven-count indictment against Walthall accuses him of disposing of four vehicles - two owned by Walthall and two owned by other MTA employees - in order to avoid repossession and stave off loan payments. The insurance companies paid off the car loan balances for Walthall and his cohorts, prosecutors said.

MTA officials cooperated with the investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Baltimore Police Department, according to federal prosecutors.

"Walthall has had his police powers suspended since the inception of this case and has not worked in any police capacity," said Chief Douglas Deleaver of the Maryland Transit Administration.

Prosecutors argue that on Feb. 26, 1999, Walthall falsely reported that his 1997 Nissan Quest had been stolen. In fact, Walthall knew that he had burned or caused the burning of the car the day before, prosecutors said.

In May 1999, prosecutors said, Allstate Insurance Co. paid the fraudulent claim.

The indictment further accused Walthall of torching his 1997 Ford Expedition and collecting insurance settlements illegally in early 2003.

He also is accused of advising Westbrook, an MTA bus and van driver, on how to dispose of a 2003 Chevrolet Tahoe she owned.

On Dec. 15, 2003, according to the indictment, Walthall picked up the Chevrolet Tahoe and then had it burned. Westbrook then submitted a fraudulent claim to State Farm Insurance Co., according to the indictment.

By the end of December, Lurz and Walthall also arranged to burn Lurz's 2003 Audi TT Quattro so Lurz could collect the insurance proceeds, prosecutors said. They carried out the scheme on New Year's Day, prosecutors said.

matthew.dolan@baltsun.com

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