Former National General Loss Representative and Mother Charged in Insurance Claims Fraud Scheme

Insurance industry regulators have uncovered an elaborate fraud scheme involving a former National General Insurance Co. employee and his mother that cost the insurer over $141,000 in fraudulent claims, officials reported this week.

Horace Kelly, 40, who worked as a loss representative for National General, and his mother Greta Patterson, a 62-year-old minister, were arrested and booked into jail in Coffee County, Georgia following a comprehensive investigation by the Georgia Office of Insurance Commissioner.

The investigation revealed that Kelly allegedly exploited his position at National General to create numerous fictitious insurance claims, then issued checks totaling $146,167 over a seven-month period in 2022. According to authorities, Kelly and Patterson cashed or deposited more than 100 fraudulent insurance checks during this time, with evidence showing that substantial portions of the money were transferred to Patterson’s personal bank accounts.

“This case represents a particularly concerning breach of trust within the insurance industry,” said a spokesperson from the Georgia Office of Insurance Commissioner, who requested anonymity as the investigation continues. “The alleged perpetrator used inside knowledge of insurance processes to circumvent normal verification procedures.”

What makes the case particularly troubling for industry observers is that the affected National General policyholders were completely unaware that claims had been filed using their policy information. This type of internal fraud presents significant challenges for insurance companies, which must balance streamlined claims processing with adequate security measures to prevent employee misconduct.

The scheme began to unravel when the Lowndes County Sheriff’s Office initiated an investigation in August 2022 after detecting irregularities in insurance payment patterns. They subsequently notified the Insurance Commissioner’s office, leading to a coordinated investigation that spanned several months before culminating in the arrests.

Both Kelly and Patterson now face charges of insurance fraud, a serious offense in Georgia that can carry substantial penalties including imprisonment and fines. They have been released on bond while awaiting further legal proceedings.

The case highlights the growing problem of insurance fraud, which costs the industry billions annually and ultimately leads to higher premiums for consumers. The Insurance Information Institute estimates that fraud accounts for approximately 10 percent of property-casualty insurance losses each year.

Industry experts note that internal fraud schemes like this one are particularly damaging because they exploit legitimate access to systems and processes designed to help customers in times of need.

“When someone with insider access commits fraud, it can be more difficult to detect initially because they understand how to make fraudulent claims appear legitimate,” explained insurance fraud specialist Rebecca Harmon, who is not involved in the case but has studied similar schemes. “Companies increasingly rely on advanced analytics and artificial intelligence to flag unusual patterns that might indicate internal fraud.”

National General Insurance, which was acquired by Allstate in 2021 for $4 billion, has not publicly commented on the specific details of the case, but company representatives have indicated they are cooperating fully with investigators.

Authorities have indicated that the investigation remains active, with additional charges possibly forthcoming as they continue to trace the full extent of the scheme and determine if other individuals may have been involved.

This case underscores the importance of robust internal controls within insurance companies and highlights the ongoing challenges the industry faces in combating fraud while maintaining efficient claims processing for legitimate policyholders.