SC School District Seeks $42.5 Million in Insurance Fraud Suit

CHARLESTON, S.C. (CN) – A South Carolina school sued its former chief financial officer, insurance companies and others over what it claims was “a series of insidious schemes” through which the defendants defrauded the district and its taxpayers out of millions of dollars.

In a federal complaint filed in Charleston on Thursday, the Berkeley County School District claims Brantley Thomas, the district’s former chief financial officer, and the other defendants engaged in the alleged schemes over the course of many years.

Thomas, 61, pleaded guilty on Jan. 16, to twenty federal charges involving embezzlement, money laundering and public corruption, according to South Carolina U.S. Attorney’s office.

He faces up to 300 years in prison and more than $5 million in fines on those charges, which are felonies.

In a written statement, U.S. Attorney Beth Drake said over the years, Thomas overpaid the school district’s vendors so that they’d cut a refund check to the district. Once he received the refund checks, prosecutors said, he would convert the funds to his own use.

In its lawsuit, the school district claims that insurance consultants provided Thomas with cover for the scheme that ultimately cost the it more than $14,1 million in premiums and consultant fees.

The district also claims the insurance defendants would provide Thomas with kickbacks in exchange for making sure that certain policies were renewed or purchased.

Federal indictments against Thomas charge that between 2013 and 2016, he received $32,000 from an insurance agency in increments of $2,000. According to the lawsuit, the conspiracy began as early as 2001.

“The insurance agents were eager allies and more than willing to breach their fiduciary duties…Under the guise of protecting the district, with Thomas’ assistance they were shrouded in the cloak of virtue for years,” according to lawsuit. “The veil has now been lifted to expose years of insidious opportunism with unbridled greed as the insurance defendants’ true motivator.”

The Berkeley County school board fired Thomas on Feb. 7, 2017, following a meeting with the FBI and Wells Fargo to discuss the federal probe.

In early December, a grand jury indicted Thomas on an additional 15 state counts of embezzlement and forgery. He faces up to 135 years in prison if convicted on those charges..

 

The Berkeley County school district seeks $42.5 million in compensatory and treble damages, plus punitive damages, interest and attorneys’ fees and court costs.

Representatives of the defendants could not immediately be reached for comment.

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