The DC Department of Insurance, Securities and Banking (DISB) was involved in the investigation of a fraud case that resulted in the conviction of Mark Stopchinski of Fairfax Station, VA, on July 8, 2011. Mr. Stopchinski was sentenced in US District Court for the Eastern District of Virginia to 36 months in prison for misleading policy holders into purchasing life insurance policies in an effort to generate additional commissions. The prison term will be followed by two years of supervised release. He was also ordered to forfeit $1.6 million. He pleaded guilty October 21, 2010, to one count of wire fraud and one count of aggravated identity theft.
In June 2009, the FBI and Virginia State Corporation Commission, Bureau of Insurance requested DISB’s involvement in the investigation of Mr. Stopchinski’s questionable insurance activities in the DC metropolitan area. Subsequent investigations and court records showed that Mr. Stopchinski forced insurance agents working for him, and companies he owned in Virginia and the District of Columbia, to advertise the sale of health insurance through illegal “fax blasts.” The intention was to misrepresent the nature of the insurance policies for sale so individuals believed they were purchasing health insurance policies, when in fact, they were purchasing two separate unrelated policies: one health insurance and one life insurance policy. Each policy was provided by separate insurance companies, requiring separate premiums, with each paying commissions to the defendant.
DISB’s Commissioner William P. White said that Stopchinski’s fraudulent scheme was not new to the department.
“There have been at least two other investigations in which insureds were paying for additional policies that they did not know existed,” said Commissioner White, who commended DISB’s Senior Fraud Investigator Carl Ditchey, who participated in the investigation.
To further the scheme, Mr. Stopchinski falsified applicants’ signatures on paperwork and correspondence to the insurance companies, and falsified the signatures of his agents on the life insurance policy applications and supporting documents. Mr. Stopchinski sent the fraudulent life insurance applications to the life insurance companies and received commissions that were typically in excess of 100 percent of the total value of the first year’s premiums. Mr. Stopchinski’s multi-year scheme resulted in more than $2 million in life insurance commissions from approximately 10 different insurance companies.