Funeral homes victims of fraud

Two Maryland insurance agents, who allegedly bilked African-American funeral homes out of more than $820,000, have been hit with a record fine and ordered to pay the money back, the state's insurance commissioner said yesterday.

The Maryland Insurance Administration said the agents - William Ray Miller II of Severna Park and Donna Mannino of Eldersburg - operated Severna Park businesses that defrauded at least five clients in a variety of ways that can be traced back half a decade.


Activities by the business partners include overcharging, erroneously requiring interest payments on premiums and collecting fees for nonexistent property and casualty insurance policies, according to the state administration.

Some clients with actual policies lost coverage because their payments were not forwarded to the insurers, the state said.


Alfred W. Redmer Jr., Maryland's insurance commissioner, said the $225,000 fine is the largest the state has levied against insurance agents. The administration, which revoked the pair's licenses last Friday, turned the case over to the attorney general's office for criminal investigation.

"This should serve as a warning," Redmer said, calling it an "egregious example of insurance fraud."

Gary R. Jones, a Baltimore attorney representing Miller, said his client denies committing fraud and has tried unsuccessfully for months to meet with the insurance administration to defend himself. An administrative hearing is scheduled for Friday morning.

"There were some errors made on some accounts ... and he's offered restitution," Jones said. "But in the main the vast majority of the allegations that were made in the document that I saw on Friday are incorrect."

Mannino did not return phone calls yesterday.

Redmer said Miller and Mannino, acting as brokers between clients and insurance companies, primarily targeted funeral homes owned by African-Americans.

They operated through three businesses, North American Risk Management Inc., Corporation Risk International Inc. and National Management Systems LLC.

State documents name five companies victimized: March Funeral Homes in Baltimore; James A. Morton & Sons Funeral Home Inc. in Baltimore; Marshall's Funeral Home of Maryland Inc. in Suitland; Liberty Services Corp. in Delaware, which operates funeral homes in 10 states; and Wilson Financial Group Inc. in Texas, which also operates in 10 states.


The pair paid some claims on imaginary policies to perpetuate the "myth" that coverage existed, said P. Todd Cioni, the insurance administration's associate commissioner of compliance and enforcement.

When the policies did exist, they advised funeral homes to finance the premium payments through one of their companies, not mentioning that the insurance carriers offered interest-free installment options, Cioni said. They pocketed the interest charges, he said.

In some cases, the state said, instead of passing the full payment along to the insurers as promised, they made payments in installments - and not all were made on time.

Victor C. March Sr., chief executive officer of March Funeral Homes, uncovered the problem in June while conducting an internal audit to train a new controller.

March, a certified public accountant, said the pair charged him much more than the true cost of the insurance. Over five years, they bilked his company out of $186,000, he said.

Miller was able to slip it by in part by claiming that insurance rates jumped after the terrorism attacks of Sept. 11, 2001, March said. "We didn't question it - it just sounded logical to us," he said.


March said he filed a complaint with the state and warned other funeral homes dealing with the pair to do their own audits.

"I was outraged," March said. "I was hurt, obviously - I felt betrayed. When you're dealing with someone for 10 years, you feel you've got a good, strong business relationship and a personal relationship."

He is particularly angry that the targets appear to have been selected by race. Both Miller and Mannino are white, he said.

"He probably figured we were easy prey," March said.

Miller and Mannino apparently ran a similar fraud scheme in the mid-1990s while managing the Maryland operations of J.L. Hickman Inc., a Texas insurance agency, according to the state. Insurance Company of North America won a $500,000 judgment against Miller in 2001, and Reliance Insurance Co. won a $472,500 judgment against both in 2000.

The Hickman agency's license was revoked in 1999. Marshall's Funeral Home is considering legal action of its own against Miller and Mannino. March said he might sue as well.


"We'll be in a line of - I'm sure - many," he said.