Former Insurance Broker Sentenced in $3.7 Million Fraud Scheme

A former insurance broker from Gwinnett was sentenced to prison in a $3.7-million fraud scheme in which he sold phony insurance policies to hundreds of trucking companies.

John Paul Kill, 63, of Peachtree Corners, was sentenced to four years in federal prison, followed by three years of supervised release, the U.S. Attorney’s Office in Atlanta said in a news release.

He also was ordered to pay $1.23 million in restitution to the victims.

Prosecutors said Kill, the former operator of Appeal Insurance Agency, collected millions from nearly 800 trucking companies by selling or brokering fictitious cargo insurance policies.

• RELATED: Peachtree Corners Man Charged with Selling Fake Insurance Policies

The U.S. Attorney’s Office announced the sentence Tuesday.

“The defendant held himself out as an honest broker to hundreds of trucking companies, but he simply pocketed their premium payments instead of securing legitimate insurance coverage,” said U.S. Attorney John Horn. “His scam tricked clients into believing they had proper insurance coverage and endangered small businesses operating in more than 20 states.”

According to charges and other information presented in court, Kill began offering cargo insurance policies in 2013, issuing policy binders to clients that claimed Lloyd’s of London would provide insurance coverage. But, Kill never made a deal with Lloyd’s to provide coverage and instead pocketed the premium payments.

“Most of the victims received no insurance policies at all, and Kill instead attempted to pay claims for losses out of the premium payments he collected from new victims,” the U.S. Attorney’s Office said in the news release.

The scheme, which spanned from 2013 through mid-2014, affected trucking companies in more than 20 states: Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia.

Kill pleaded guilty on May 6, 2015.