ELECTRONICALLY FILED
2012 Feb 09 AM 9:36
CLERK OF DISTRICT COURT - WOODBURY
IN THE IOWA DISTRICT COURT FOR WOODBURY COUNTY
THE STATE OF IOWA,
Plaintiff,
CRIMINAL NO.
DOUGLAS EDMOND INLAY,
COMPLAINT and AFFIDAVIT
vs.
Defendant.
Count 1
Said Defendant is accused of the crime of COMMISSION OF A
SPECIFIED UNLAWFUL ACTIVITY, a Class B Felony, in violation of
Iowa Code section 706A.2(4), in that the Defendant on or about November
8, 2010, through June 7, 2011, in Woodbury County, Iowa, conducted
insurance business without a license, an act for financial gain on a
continuing basis, that is punishable as an indictable offense.
Count 2
Said Defendant is accused of the crime of ACTING AS AN
INSURANCE PRODUCER WITHOUT A LICENSE, a Class D Felony, in
violation of Iowa Code section 507A.10(3), in that the Defendant on or
about November 8, 2010 through December 10, 2010, in Woodbury County,
Iowa, acted as an insurance producer without proper licensure and/or
willfully violated a provision of Iowa Code chapter 507A, or any rule
adopted or order issued under that chapter, to-wit: acted as an insurance
producer by signing advertisement agreements with the Sioux City
Journal.
Count 3
Said Defendant is accused of the crime of ACTING AS AN
INSURANCE PRODUCER WITHOUT A LICENSE, a Class D Felony, in
violation of Iowa Code section 507A.10(3), in that the Defendant on or
about November 5, 2010, through December 15, 2010, in Woodbury
County, Iowa, acted as an insurance producer without proper licensure
and/or willfully violated a provision of Iowa Code chapter 507A, or any rule
adopted or order issued under that chapter, to-wit: produced Progressive
Insurance policies.
Count 4
Said Defendant is accused of the crime of ACTING AS AN
INSURANCE PRODUCER WITHOUT A LICENSE, a Class D Felony, in
violation of Iowa Code section 507A.10(3), in that the Defendant on or
about April 20, 2011, through June 2, 2011, in Woodbury County, Iowa,
acted as an insurance producer without proper licensure and/or willfully
violated a provision of Iowa Code chapter 507A, or any rule adopted or
order issued under that chapter, to-wit: filed claims as an insurance agent
on five MetLife Insurance policies.
Count 5
Said Defendant is accused of the crime of ACTING AS AN
INSURANCE PRODUCER WITHOUT A LICENSE, a Class D Felony, in
violation of Iowa Code section 507A.10(3), in that the Defendant on or
about May 17, 2011, in Woodbury County, Iowa, acted as an insurance
producer without proper licensure and/or willfully violated a provision of
Iowa Code chapter 507A, or any rule adopted or order issued under that
chapter, to-wit: completed a cancellation request of a Liberty Mutual
insurance policy listing himself as an insurance producer.
Count 6
Said Defendant is accused of the crime of ACTING AS AN
INSURANCE PRODUCER WITHOUT A LICENSE, a Class D Felony, in
violation of Iowa Code section 507A.10(3), in that the Defendant on or
about November 8, 2010, through June 7, 2011, in Woodbury County, Iowa,
acted as an insurance producer without proper licensure and/or willfully
violated a provision of Iowa Code chapter 507A, or any rule adopted or
order issued under that chapter, to-wit: acted as an insurance producer in
12 insurance binders located on the business premises.
Count 7
Said Defendant is accused of the crime of COMMISSION OF A
SPECIFIED UNLAWFUL ACTIVITY, a Class B Felony, in violation of
Iowa Code section 706A.2(4), in that the Defendant on or about December
28, 2010 through June 30, 2011, in Woodbury County, Iowa, committed
fraudulent submissions to an insurer, an act for financial gain on a
continuing basis, that is punishable as an indictable offense.
Count 8
Said Defendant is accused of the crime of FRADULENT
SUBMISSION TO AN INSURER, a Class D Felony, in violation of Iowa
Code section 507E.3(2)(c), in that the Defendant on or about February 3,
2011, in Woodbury County, Iowa, with the intent to defraud an insurer,
presented or caused to be presented to an insurer, any written document or
oral statement as part of, or in, an application for insurance coverage,
knowing that such document or statement contains false information
concerning a material fact, to-wit: eight fraudulent Allied insurance
policies.
Count 9
Said Defendant is accused of the crime of FRADULENT
SUBMISSION TO AN INSURER, a Class D Felony, in violation of Iowa
Code section 507E.3(2)(c), in that the Defendant on or about December 28,
2010, through June 30, 2011, in Woodbury County, Iowa, with the intent to
defraud an insurer, presented or caused to be presented to an insurer, any
written document or oral statement as part of, or in, an application for
insurance coverage, knowing that such document or statement contains false
information concerning a material fact, to-wit: six fraudulent MetLife
insurance policies.
Count 10
Said Defendant is accused of the crime of FRAUDULENT
PRACTICE IN THE FIRST DEGREE, a Class C Felony, in violation of
Iowa Code section 714.8(10), 714.9 and 524.1607, in that the Defendant on
or about November 5, 2010, through April 8, 2011, in Woodbury County,
Iowa, knowingly made or caused to be made, directly or indirectly, a false
statement in writing concerning the financial condition of such person with
the intent that such statement be relied upon by a bank for the purpose of
procuring the receipt of credit in any form for the benefit of such person, towit: Pinnacle Bank and flood insurance guarantee.
Count 11
Said Defendant is accused of the crime of FORGERY, an Aggravated
Misdemeanor, in violation of Iowa Code section 715A.2(2)(b), in that the
Defendant on or about May 19, 2011, in Woodbury County, Iowa, with the
intent to defraud or injure another, altered, made, completed, executed,
authenticated, issued or transferred a will, deed, contract, release,
commercial instrument, or other writing or document evidencing, creating,
transferring, altering, terminating, or otherwise affecting legal relations so
that it purported to be the act of another who did not authorize that act and/or
with the intent to defraud or injure another, uttered or possessed a will, deed,
contract, release, commercial instrument, or other writing or document
evidencing, creating, transferring, altering, terminating, or otherwise
affecting legal relations which the Defendant knew to be forged, to-wit:
insurance policy declaration to Pinnacle Bank.
THEREFORE, complainant requests that the Defendant, subject to
bail or conditions of release, (1) be arrested or that other lawful steps be
taken to obtain the Defendant's appearance in court or (2) be detained, if
already in custody, pending further proceedings, and that the Defendant
otherwise be dealt with according to law.
Complainant Amy E. Klocke
Woodbury County Attorney's Office
AFFIDAVIT
I, the undersigned complainant, being first duly sworn on oath, do
hereby depose and state that I believe the above-named Defendant
committed the above-named public offense based upon the following facts
known by me or told to me by other reliable persons, to-wit: John Meeker,
Special Investigator with the Iowa Insurance Fraud Bureau:
On November 2, 2010, the Defendant’s Iowa insurance producer’s
license was revoked by the Iowa Insurance Division. From November 8,
2010, through June 7, 2011, the Defendant has continued to act as an
insurance producer in the State of Iowa for financial gain.
Counts 1 and 2:
On November 8, 2010, the Defendant signed an advertising agreement
with the Sioux City Journal to run several advertisements from November 8,
2010 through May 8, 2011. The ad was for Agency One Insurance, which
was owned and operated by Douglas Inlay. The advertisements included the
Defendant’s name, cellular phone number, and personal email address. The
advertisement also included a business phone and fax number for Agency
One. The advertisements were published in the Sioux City Journal on
November 16, 22, 23, and 28 of 2010. Advertisements were also published
on December 7 and 10 of 2010. In the December 10, 2010 advertisement,
Inlay’s name and email address were removed; only his cellular phone
number was listed in the advertisement. An employee at the Sioux City
Journal will testify Inlay conducted the business transactions at the Sioux
City Journal for the advertisements. The Iowa Insurance Division contacted
the Defendant through mail on December 2, 2010 and informed him he
could not advertise or engage in insurance practices since his license was
revoked on November 2, 2010 and informed the Defendant of the criminal
penalties for continuing to act as an insurance producer.
Counts 1 and 3:
Between November 5, 2010 and December 15, 2010, the Defendant
produced six (6) insurance policies with Progressive Insurance Company.
Progressive Insurance confirmed the policies were sold by the Defendant
and a commission was paid to Agency One Insurance. The Defendant
requested the reinstatement of a policy from Progressive on behalf of
policyholder J.M. on December 10, 2010. The Defendant requested a
cancelation of a policy with Progressive Insurance for policyholder S.K. on
April 20, 2011.
Counts 1 and 4:
Between April 20, 2011 and June 2, 2011, the Defendant filed five
claims with MetLife Insurance. The claim for M.W. was filed on April 20,
2011, and the claim for R.H. was filed on June 2, 2011. A claim for K.C.
was filed on May 23, 2011, a claim for D.T. was filed on May 11, 2011, and
a claim for himself (Inlay) was filed on May 11, 2011. The Defendant listed
himself as the agent for all claim filings.
Counts 1 and 5:
On May 17, 2011, the Defendant completed a cancellation request for
C.W. through Liberty Mutual Insurance. During a search warrant of Agency
One, Agents located the document in the trash. The Defendant was listed as
the insurance producer.
Counts 1 and 6:
During the search warrant execution, agents located 12 insurance
binders signed by the Defendant between the dates of November 8, 2010 and
June 7, 2011. Insurance binders are used to show proof of insurance to a
lender securing property or to another insurance company when they are
making the decision to provide insurance to someone. In order to have an
insurance binder, a customer would need to reach an agreement on a policy
and paid the premium or made arrangements to pay the premium.
Counts 7 and 8:
On or about December 28, 2010, through June 30, 2011, the
Defendant, who owned numerous rental homes in Sioux City, Iowa,
obtained insurance for those properties through Allied Insurance and
MetLife. When presenting information about 15 properties to the insurance
companies, the Defendant gave the wrong date of construction, which
caused his premium to be less since the construction date was
misrepresented. The Defendant received financial gain by not paying the
correct premium based on the age of the homes.
On February 3, 2011, the Defendant contacted Allied Insurance to
insure nine (9) of his rental homes that had been previously insured by
Buckeye Insurance. The Defendant attached the declaration pages from
Buckeye and sent them to Adam White, an Underwriter for Allied, and
stated he needed coverage immediately. Allied provided insurance for the 9
properties. After being contacted by the Iowa Insurance Division, Kay
Godfredson, an Allied employee, confirmed that the information supplied by
the Defendant could have affected the decision to provide coverage for the
homes at all, but may have impacted premiums.
Counts 7 and 9:
On December 28, 2010, June 17, 2011 and June 30, 2011, the
Defendant presented false information to MetLife concerning the age of
construction on six (6) rental properties. Peter McGarvey, a MetLife
employee, confirmed that the premiums for some of the properties would
have been higher if MetLife had known the accurate date of construction for
the properties.
Count 10:
During execution of the search warrant at Agency One Insurance on June 9,
2011, agents discovered an original document in the trash that appeared to
be altered. The document was a Fidelity National Property and Casualty
Insurance Company flood declarations page. Information on the page
appeared to have been removed with “white out” It appeared the policy
period had been changed by taping a small piece of paper onto the form.
Agents also found a document showing altered dates. Agents found several
emails between the Defendant and Josh Kovarna, Vice President of Pinnacle
Bank in Sioux City pertaining to 2209 Myrtle Street and required flood
insurance. Kovarna will lay foundation for the entry of the emails into
evidence. The emails discuss the Defendant needing to provide proof of
floor insurance for 2009 Myrtle Street. An email from May 17, 2011, from
Kovarna indicated that he had received the flood insurance declarations
page, but the insurance amount was only $31,000 and needed to be $37,000.
On January 4, 2011, the Defendant faxed a document appearing to be proof
of flood insurance from Fidelity Insurance to Kovarna with coverage dates
of November 5, 2010 through November 5, 2011. Agents located a “Notice
of No Coverage” from Fidelity Insurance to the Defendant for 2209 Myrtle
Street. Michael Brogan, an employee for Fidelity, will testify that Fidelity
did not provide a flood insurance policy for 2209 Myrtle Street prior to May
9, 2011.
Count 11:
On May 19, 2011, the Defendant faxed a flood coverage document
from Fidelity insurance to Pinnacle Bank for property at 2209 Myrtle Street.
The form showed an increase in coverage from $31,000 to $38, 000. The
agent’s signature was initialed as “JS”. Joe Sauce is a former agent working
in the Defendant’s office. Sauce was not working for the Defendant on May
19, 2011. Sauce confirmed that he did not sign or initial the documentation
that the Defendant sent to Pinnacle Bank stating he had flood insurance
coverage for 2209 Myrtle Street.
All of these events occurred in Woodbury County, Iowa.
Complainant Amy E. Klocke
SUBSCRIBED and SWORN to before me by the person signing this
Complaint and Affidavit on February 8, 2012.
Notary Public
I, the undersigned Judge, have determined from the complaint that
there is probable cause to believe that the above-named Defendant
committed the above-named public offense.
56069