Barbados Supervisor of Insurance helps convict US fraudster
Thursday July 21 2011 | 05:19 AM

A 10-year-old letter from Barbados' Supervisor of Insurance office has sealed the fate of an American convicted for conspiracy to commit mail/wire fraud worth almost $5.8 million.

Barbados TODAY learnt that in a decision recently delivered by the United States Court of Appeals, Sixth Circuit, Darrell Crosgrove and his legal team failed to overturn his original conviction, including having the June 15, 2001 correspondence from Barbados thrown out.

Based on the outcome of the case, testimony from witnesses and other information produced by US authorities it appeared an insurance company called Midwest was established in Barbados to help dupe investors.

The letter from the Supervisor of Insurance here had been considered a key part of the evidence, but Crosgrove questioned its authenticity and how it had gotten into the hands of American government representatives.

According to court documents, Crosgrove was recruited into an ongoing fraudulent insurance scheme in early 2001, formally doing so by accepting a "claims adjuster" position between March and June of that year.

Officials said the "conspiracy" involved the operation of two professional organisations - the American Real Estate Association and the Noble Group, both of which were created in the early nineties. The two were marketed in the US to real estate agents and appraisers as professional entities "that would provide members with certain benefits, most prominently errors-and-omissions insurance coverage".

Barbados entered the equation due to the establishment of Midwest, which was to provide insurance to AREA/Noble "that would provide errors-and-omissions coverage to all of the organisations' members in good standing".

But the evidence revealed that soon after its creation Midwest's owner "stopped sending member dues to the company that managed Midwest's operations", and the company "fell into arrears on premium payments to its reinsurer, and its policy was cancelled". By the middle of 1996, the court said, Midwest "had virtually no cash on hand and no reinsurance".

"The government also introduced a letter from the Supervisor of Insurance for Barbados informing Crosgrove that Midwest's Barbados license had been revoked a year earlier and that Midwest might be operating without a valid licence in the United States. This letter was dated June 15, 2001," information from the US court stated.

"Taking the trial evidence in the light most favorable to the Government, Crosgrove began working at AREA/Noble no later than late-May 2001. Therefore, the jury could have concluded from the Barbados letter that Crosgrove had notice within weeks of beginning work at AREA/Noble that the company had no valid outside carrier," it added.

In his now unsuccessful appeal Crosgrove argued that US "did not present sufficient evidence at trial to support either conviction" for fraud or money laundering.

"Because there was sufficient evidence of a conspiracy to commit mail/wire fraud, Crosgrove's conviction for that count must be affirmed. However, the government did not produce sufficient evidence at trial to support the conspiracy to commit money laundering charge, and the judgment of conviction for that count has to be vacated," the appeal judgment stated.

"Crosgrove also contends that the district court committed several errors in evidentiary rulings, that certain evidence presented at trial was obtained in violation of the Fourth Amendment, that he received ineffective assistance of trial counsel, that the prosecutor engaged in misconduct, and that the district court committed several errors in calculating his sentence. All of these claims are without merit, forfeited, or premature, and are therefore rejected."

The appellant had argued that the letter from Barbados "was improperly admitted ... hearsay and was never properly authenticated", and also that "no chain of custody was established".

This was disputed by the court, which said the document "was not hearsay and was adequately authenticated, and Crosgrove's newly raised chain-of-custody argument does not suggest plain error".