Ian Stuart Smith receives eight-year prison sentence for fraud scheme

Canadian resident Ian Stuart Smith has been sentenced to more than eight years in prison for his part in a fraud scheme, in which insurance agents for various entities throughout the United States and Canada were induced to purchase millions of dollars of fraudulently issued commercial liability insurance policies.
Smith received his 97-month sentence in New Yorks Manhattan federal court on Sept. 18, 2007.
United States District Judge Jed Rakoff also ordered Smith to pay more than US$7.5 million in restitution to his victims and to forfeit approximately $7.4 million and pay a fine of US$15,000.
According to the indictment and Smiths guilty plea in June 2004, Smith held himself out to New York insurance brokers as a wholesale insurance broker able to place insurance coverage, despite the fact that he was not registered as such as required under New York law.
The indictment says Smith also falsely claimed to be an authorized agent for various insurance companies or entities, including underwriters at Lloyds of London, Great American Insurance Co., Mount Vernon Fire Insurance Company, Indian Harbor, Colony Insurance, Tower Insurance, Travelers Insurance, Houston Casualty, Essex Insurance Company, and Markel Insurance.
According to the indictment, Smith collected for himself the premium payments for the bogus commercial liability insurance policies he falsely claimed he had placed with various insurance companies and entities, and created fictitious documents purporting to confirm the existence of insurance coverage as part of the scheme.
Smith, 57, resided in Ontario, Canada, until his arrest on May 5, 2006. He was detained in Canada following his arrest and has remained in custody since he was extradited to the United States.