Insurer Wins Fraud Case

September 1998

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Insurer Wins Fraud Case

Victims get major settlement

In a landmark decision, a Texas jury awarded Jewelers Mutual Insurance Co. and a Houston man $35.8 million as fraud victims in two phony robberies. According to lawyers for Jewelers Mutual, it was the first time an insurer has ever asked for punitive damages in a property insurance fraud case.

In 1991 Kenneth Gilde gave personal jewelry to jeweler Gerard Milici to sell for him. When Gilde inquired about the status of the sale in December, Milici said the jewelry had been stolen in a robbery and that he had filed a $341,000 claim with his insurance company, Jewelers Mutual.

Earlier that year, Milici claimed $295,000 for losses in another robbery and Jewelers Mutual paid it. In both robberies, however, Milici claimed losing some of the same jewelry. Milici allegedly sold Gilde and other customers high-quality jewelry at discount prices, then told the insurance company the jewelry had been stolen.

Jewelers Mutual will receive 79% of the $35 million punitive damage award; Gilde will receive the balance. Actual damages of $634,000 were awarded to Jewelers Mutual and $164,000 to Gilde. The jury foreman minced no words in describing why the panel assessed the large award: "We wanted to send a message we're not going to put up with fraud."

Ron Harder, president of Jewelers Mutual, agreed. "We're delighted with the verdict because we want to show that fraud will not be tolerated."

– by Jack Heeger

 

 

 



Copyright © 1998 by Bond Communications.


 

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