Nampa Insurance Agent, Councilman Guilty of Insurance Fraud

November 25, 2013

A former Idaho city councilman has pleaded guilty to insurance fraud, the latest elected official from a small town in Idaho to recently acknowledge illegal activities that undermine trust in public officeholders.

Former Nampa City Council member Bob Schmidt buried his face in his hands as he pleaded guilty Thursday in 3rd District Court to one felony count of insurance fraud, The Idaho Press-Tribune reported.

As part of a plea deal, Idaho attorney general special prosecutor Rondee Blessing agreed not to pursue additional fraud charges.

The attorney general handled the case to avoid a potential conflict of interest, given Schmidt’s former ties to public officials in Canyon County, where Nampa is located. Schmidt served on the council from 2002 to 2007.

Prosecutors said Schmidt misappropriated funds from his insurance agency, made transactions without the appropriate licenses and made false statements relevant to insurance transactions.

The indictment claims that starting around December 2010, Schmidt pocketed clients’ money, presented falsified cancellation requests regarding policies, and conducted insurance transactions without a license.

In May 2011, Schmidt lost his insurance license for “using fraudulent, coercive or dishonest practices,” according to a civil complaint filed with the Idaho Department of Insurance.

In that case, Schmidt was hit with more than $7,000 in fines and penalties by the department, according to documents filed with the state.

The complaint says a Nampa restaurant owner paid Schmidt for a policy, but Schmidt never passed it along to the insurance company. The policy was canceled without the owner’s knowledge – and he didn’t learn he wasn’t covered until after his restaurant caught fire.

In 2011, Schmidt was also accused by a Babe Ruth baseball organization of misappropriating more than $3,500 that it had intended for insurance premiums.

On Thursday, Schmidt offered only terse yes and no statements to the judge indicating he understood the proceedings and was accepting responsibility.

Schmidt couldn’t be reached for comment Friday because his phone was disconnected. His lawyer, Ryan Dowell, declined to comment.

Sentencing is expected in January.

With his plea, Schmidt joins a former sheriff from Minidoka County as well as an ex-city councilman from Rigby who also have been convicted of crimes.

This week, Lawrence Blackburn, 50, a former councilman from the eastern Idaho town of Rigby, was ordered to spend 150 days in jail and 10 years on probation for taking money from the estate of a deceased business client two years ago. Blackburn also must pay $30,000 in restitution and serve 100 hours of community service for his conviction on insurance fraud.

Also this week, former Minidoka County Sheriff Kevin Halverson agreed to pay just over $950 in restitution after previously pleading guilty to misuse of public funds for personal fuel purchases charged to the county.

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