Former Idaho Councilman Sentenced for Insurance Fraud

February 7, 2014

A former Nampa City Council member has been sentenced to 90 days in jail and 12 years of supervised probation for insurance fraud.

The Idaho Press-Tribune reports that terms of the sentence given to Bob Schmidt on Tuesday in 3rd District Court require him to pay $47,000 in restitution.

Judge George Southworth said that if Schmidt fails to pay at least $500 a month he could end up in prison.

“Mr. Schmidt, regardless of how you characterize it, or how you justify it, you were stealing,” Southworth said. “You’re lucky there are not a great deal more claims that are out there.”

Schmidt pleaded guilty in November to one felony count of insurance fraud. He served on the council from 2002 to 2007.

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

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

Schmidt told the court a collapsing marriage and struggling business caused him to get in over his head.

“I kept trying to juggle things,” Schmidt said. “It just went sideways, your honor, and I take full responsibility.”

Schmidt in court said he’s working a full-time job and two part-time jobs and hopes to have the court-ordered restitution paid off within a year.

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 said 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.

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