Federal prosecutors say the former agent kept client premiums, misrepresented coverage and later sold a book containing lapsed or nonexistent policies.
A former Virginia insurance agent has pleaded guilty to wire fraud after collecting client premiums and using the money for personal expenses instead of forwarding it to insurance carriers.
Thomas Robert Hoyt, 32, of Melfa, entered the guilty plea Aug. 21, according to the U.S. Attorney’s Office for the Eastern District of Virginia. Prosecutors said the scheme generated approximately $164,345 in fraudulently obtained funds.
Hoyt had contracts with insurance carriers to sell policies to clients. For certain policies, he instructed customers to send their premium payments directly to him and represented that he would transfer the funds to the appropriate insurers.
According to court documents, Hoyt repeatedly assured clients that their policies were active while keeping the premium payments for personal use. A federal review of his bank accounts found that approximately half of the money flowing into his business was diverted to personal expenses, including substantial cash withdrawals.
The Virginia Bureau of Insurance began investigating after receiving complaints from Hoyt’s clients and contacted him in June 2021. On Sept. 9, 2021, Hoyt agreed to the permanent revocation of his individual insurance license and the license held by Hoyt Insurance.
Hoyt later sold his book of business to a small independent insurance agency. Prosecutors said he falsely represented that all premiums associated with the transferred policies had been paid and that no investigations were pending.
The purchasing agency paid Hoyt a $27,282.28 down payment. After reviewing the accounts, the buyer discovered that many policies had lapsed or had never taken effect because Hoyt had not sent the required premiums to the carriers.
The Bureau of Insurance referred the case to the U.S. Postal Inspection Service in August 2022. The federal investigation resulted in the wire fraud charge and guilty plea.
Hoyt is scheduled to be sentenced Dec. 10. He faces a maximum penalty of 20 years in federal prison, although the court will determine the sentence after reviewing federal sentencing guidelines and other statutory factors.
The case was announced by First Assistant U.S. Attorney Theophani K. Stamos and USPIS Washington Division Inspector in Charge Damon E. Wood. Assistant U.S. Attorney Rebecca Gantt is prosecuting the case.
Information for this article was provided by U.S. Attorney’s Office, Eastern District of Virginia. Views and claims expressed in this article are those of the source company and do not necessarily reflect the views of AgencyEquity.com. This article may have been edited with the help of AI.
