State says PG County schools CFO committed insurance fraud in claim of lost diamond ring

School system 'launching an inquiry,' according to spokesman

(Handout photo )
September 20, 2014|Doug Donovan | The Baltimore Sun

Buying a diamond ring is always a costly expense.

Claiming to lose it — twice — came at an even steeper price for Colby White, chief financial officer for Prince George's County public schools.

The Maryland Insurance Administration has ruled White and his wife, Keisha, who works as an internal auditor for the school system, committed insurance fraud by filing a claim for a lost diamond ring that another insurer had already paid $16,313 to replace months earlier.

The agency said the couple "knowingly violated" Maryland insurance law in filing two claims for the same loss. They were ordered to pay $6,000 in civil fines, according to an Aug. 13 order released last week and obtained by The Baltimore Sun. The couple has paid the fine and did not appeal the order.

School officials were unaware of the insurance agency's ruling until informed by The Sun. A spokesman for schools chief executive Kevin Maxwell said Friday that the school system was investigating the matter. School board chairman Segun Eubanks confirmed Saturday that an investigation was underway. 

On Saturday, the spokesman, Max Pugh, said that White, who earns a $169,008 salary, and his wife have been put on administrative leave with pay. 

The school system also released this statement: "Friday afternoon, we learned of a Maryland Insurance Administration order against two of our employees, Chief Financial Officer Colby R. White and his wife, Internal Auditor Keisha White.  After an initial examination of the order, both employees were placed on administrative leave with pay, pending the outcome of an internal investigation. Chief Operating Officer Monica Goldson has temporarily assumed the responsibilities of the Chief Financial Officer."

White and his wife did not return calls left on their work and home voice mails.

Colby White was appointed in June by Maxwell to manage a school system with a $1.8 billion budget.

According to the administration ruling, the Bowie couple's actions date to September of last year when Colby White informed Erie Insurance that, on Aug. 24, his wife had lost a "1.5 carat LEO diamond" ring. The couple had a homeowner's policy with Erie that provided coverage for jewelry up to $3,000 per item. They followed up by submitting documents detailing the loss of a ring valued at $12,999, and wrote that the ring was not covered by another policy.

Documents from the state insurance administration say an investigator from Erie discovered that four months earlier, on April 5, 2013, Colby White had made a loss claim for the same ring to Travelers Indemnity Insurance, which paid the couple $16,313.

In a recorded conversation with the investigator in November, Colby White denied filing a claim with Travelers for the same ring. "However, when confronted with evidence of the prior claim ... he admitted to making the prior claim and receiving compensation," the ruling states.

That same day, Colby White called Erie and asked to withdraw the claim, and faxed a letter three days later confirming the request.

Erie reported the incident to the Maryland Insurance Administration, which verified the facts. The administration's ruling states the couple admitted submitting two claims for the same ring and to providing "false or misleading information" about the claim. The couple did not file an appeal of the Aug. 13 ruling and each paid a $3,000 civil fine within 30 days of the order.

The agency stated that insurance fraud is a violation of Maryland law that "harms consumers in that the losses suffered by insurance companies are passed on to consumers in the form of higher premiums."

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