An ex-worker at a Houston home decor store has pleaded guilty in a $2 million insurance scam in which customers intentionally fell and then filed claims.
Sandra Johnson of Katy faces up to 20 years in prison. Prosecutors on Tuesday announced the former claims manager at a Garden Ridge Pottery store pleaded guilty to receiving kickbacks in the money laundering conspiracy.
According to the allegations, Johnson was employed as a claims manager by Garden Ridge and was responsible for reviewing and approving payment for injury claims filed against the retailer by its customers – commonly referred to as “slip and fall” claims.
Johnson’s sister, Natalie Jeng of Katy, was an adjuster for a business hired by Garden Ridge to also review the claims and approve payments. Jeng and two other women earlier pleaded guilty in the scam.
Jeng was allegedly employed as a claims adjuster at Hammerman & Gainer Inc., a third-party administrator hired by Garden Ridge to administer and investigate claims.
According to court documents, Johnson, Jeng and others allegedly conspired to submit false injury claims for which Johnson and Jeng would authorize payment. The fraudulent settlement proceeds would then be split amongst the alleged injury victim, Johnson, Jeng as well as other members of the conspiracy, according to the charges. In all, 26 allegedly false claims were filed against Garden Ridge which resulted in the issuance of $2,063,436 in settlement proceeds. The majority of the settlement payments were made via automated clearing house (ACH) deposits, an electronic payment method which generally involves the use of interstate wire communication facilities, according to the complaints.
Drummer and Hall, in addition to allegedly filing false claims against Garden Ridge in their own names, are also alleged to have recruited other complicit claimants into the scheme. According to court documents, when the claimants received their settlements, Drummer and Hall allegedly assisted in laundering the proceeds by directing the claimants to make kickbacks in the form of cash or cashier’s checks to other members of the conspiracy.
Johnson, Jeng and Drummer are also alleged to have traveled together on Disney Cruise Lines vacations during the time the fraud was being perpetrated.
Johnson was charged with wire fraud and money laundering in a criminal complaint filed April 14, 2014. Jeng, Drummer and Hall were each charged with conspiracy to launder funds in a criminal complaint filed May 23, 2014. If convicted of any of the charges, each woman faces up to 20 years in federal prison.
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