LINCOLN, Neb. (KOLN) – A Lincoln man is facing a theft charge after he stole nearly $850,000 from the insurance agency he worked for, investigators allege.
The Insurance Fraud Prevention Division of the Nebraska Department of Insurance received a suspected fraud claim on Nov. 13, 2023. The claim from American Heritage Life Insurance Company, Allstate Benefits alleged that Jeffrey Smith, 56, had been making fraudulent claims and collected $885,230.
According to an arrest affidavit, Smith worked as a claims examiner for American Heritage Life and reviewed claims for the company while working from home. He also had an accident policy with the company.
Investigators with the Insurance Fraud Division said a claim handled by Smith triggered an audit in 2023. Internal investigators discovered that claims on the policy totaled $935,830, and $885,230 had been paid out to Smith’s accounts. They also did not find any supporting documentation for the alleged medical services Smith had claimed, according to an arrest affidavit.
An internal investigator interviewed Smith on Nov. 9, 2023, and Smith reportedly admitted to filing the fraudulent claims because he was being “blackmailed.”
State investigators later interviewed Smith on Dec. 26, 2023. Smith was questioned about the allegations, and he explained that, “it’s really complicated.”
Smith went on to tell investigators that his friend Robby had been kidnapped in Brazil back in July of 2023. A man by the name of Pablo then called Smith and demanded $750,000 for his friend to be released, according to court documents.
Investigators said that Smith didn’t have the money, so he looked to see if he could make fraudulent claims to gather the funds and discovered he could. Smith claimed that the electronic deposits that were made to his accounts were then being transferred to Pablo.
Court documents show that despite the alleged payments to Pablo, Smith also said that nearly $500,000 of those funds were being invested in a “big project” with another individual.
State investigators said they then reviewed financial documentation from Allstate Benefits and Smith’s accounts. They said that 52 false claims were filed between April 11, 2023 and Nov. 6, 2023. Two other claims were made for a total of $102,805, but they were reversed before being deposited. Investigators think Smith collected a total of $830,895.
A warrant for Smith’s arrest was issued on Tuesday, and authorities arrested him the next day.
Smith faces one count of theft by deception $5,000+. On Thursday, a Lancaster County judge set his bond at 10% of $1,000,000 and ordered him to surrender his passport. He’s due back in court on March 13.
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Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.