Roslynn Mauskopf, United States Attorney for the Eastern District of New York, Rose Gill Hearn, commissioner of the New York City Department of Investigation, and Robin Dalgleish, acting Inspector-in-Charge, United States Postal Inspection Service, New York, announced the guilty pleas of Neil Foster Phillips, II, a funeral director and former New York City school guidance counselor, to conspiracy to commit mail fraud, and his wife Eloise Lyles-Phillips, to mail fraud, in connection with their 10-year scheme to defraud the John Hancock Life Insurance Company, Met Life Insurance Company, and the New York Life Insurance Company (collectively, the “Companies”).
The duo reportedly obtained term life insurance policies with the Companies in the names of both fictitious and living individuals, without those persons’ knowledge or permission, and by falsely reporting their deaths and collecting the proceeds of those policies. The defendants’ fraud scheme resulted in a loss of approximately $3.1 million to the Companies.
Phillips was a licensed funeral director in New York State and an employee of the J. Foster Phillips Funeral Home in Jamaica, New York, who for the past decade reportedly defrauded the Companies by fraudulently obtaining term life insurance policies from them in the names of Larry Lyles, Desiree Colson, Devon Lyles, Stephen Burnell and Dante Martin. Both Larry Lyles and Desiree Colson are the living brother and first cousin of Phillips’ wife and co-defendant Lyles-Phillips. The other names were created by Phillips and are fictitious.
In the case of Larry Lyles, Phillips assumed his identity and applied for a term life insurance policy with John Hancock in the amount of $500,000. Phillips completed the necessary paperwork, named Lyles-Phillips as the beneficiary of the policy, and sat for the required physical examination.
In June 2003, Phillips used his position as a licensed funeral director in New York State to file a death certificate with the New York City Department of Health and Mental Hygiene, fraudulently listing Larry Lyles as the deceased. The death certificate listed Emerson W. Brown Funeral Service, located at 179-24 Linden Boulevard, Jamaica, New York, as the funeral establishment. The Emerson W. Brown Funeral Service is located within the J. Foster Phillips Funeral Home, where Phillips was employed as the funeral director.
In early July 2003, Phillips and Lyles-Phillips caused a copy of Lyle’s death certificate and a notice of claim to be mailed to the John Hancock Life Insurance Company in Boston, Massachusetts, claiming that Lyles-Phillips was entitled to the proceeds of Lyles’ policy. In August 2003, John Hancock approved the claim and deposited a check in the amount of $501,825.50 into Lyles-Phillips’ bank account.
“To satisfy their personal greed, the defendants perpetrated an elaborate and ghoulish fraud that swindled millions of dollars from insurers,” stated Mauskopf. “Having pleaded guilty, each will now be held accountable for these crimes.”
New York City Department of Investigation Commissioner Hearn stated, “This investigation reminds me of a line from the movies: ‘I see dead people’. These defendants created fictitious dead people in order to execute a greedy and cynical scheme to defraud life insurance companies. This case is shocking given that Mr. Phillips was advising young people as a guidance counselor and Ms. Phillips is a former New York City Corrections Officer. They should have known better than to betray the public’s trust. Congratulations to all the investigators and prosecutors involved. “
Each defendant faces a maximum sentence 20 years imprisonment. In addition, as a part of his guilty plea, Phillips has agreed to forfeit $3.1 million to the government.
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