Georgia insurance commissioner Jim Beck has been indicted on federal charges of wire fraud, money laundering and mail fraud related to allegedly embezzled funds used to finance his election campaign in 2018. He was suspended in mid-May (of his own request) by Georgia Governor Brian Kemp while in light of the charges (which Beck denies).
Beck, a Republican, was elected last year running on an anti-establishment platform. In February 2018, Beck reported that his re-election campaign had raised some $1 million. As it turns out, the majority of it came from Beck himself and quite a bit may have been obtained illegally.
In a 38-count indictment, federal prosecutors claim that Beck defrauded his former employer, the Georgia Underwriting Association (GUA), and funneled the money into his campaign via two other companies he has an interest in.
The GUA is a state-based marketplace for providing high-risk property insurance. Beck served as a member of the board of directors of the GUA from 2012 until he took office as commissioner.
His GOP primary opponent Jay Florence was backed by the outgoing commissioner, and received financial support from the insurance industry.
The fund raising scam involved shifting money among several different entities where Beck had some financial responsibility and authority to approve invoices. Beck convinced four other associates to create new businesses that were supposed to provide services to GUA. Those entities then produced false invoices that Beck himself approved for payment. Two other companies that Beck had a controlling financial interest in (Creative Consultants and the Georgia Christian Coalition, both of them heavily involved in Georgia politics) then invoiced those four companies for services. The GUA funds were used to pay the second set of fraudulent invoices.
Beck allegedly used the money to fund his campaign, as well as pad his own retirement, investment and savings accounts, to pay his taxes, and to buy real estate.
“The grand jury seeks to hold Commissioner Beck accountable for taking advantage of his position at the Georgia Underwriting Association. Beck allegedly pocketed a substantial amount of money to which he was not entitled while he was the GUA General Manager for Operations,” said U.S. Attorney Byung J. “BJay” Pak. “To be clear, the grand jury has charged Commissioner Beck with crimes that occurred before he was elected to his current public office.”
“The FBI investigation found that Beck abused the trust of friends and his employer (GUA), in an elaborate scheme to enrich himself at GUA’s expense,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The indictment is a testament to the fact that the FBI will expend all resources necessary to hold those who seek to enrich themselves through fraud and deceit, accountable for their actions.”
Beck is not the only insurance official under scrutiny for campaign funding. In Louisiana, insurance commissioner James Donelon is being taken to task in some quarters for accepting campaign donations from insurance executive Greg Lindberg, a North Carolina-based figure who is already under indictment for conspiring to bribe North Carolina insurance commissioner Mike Causey. Causey secretly recorded conversations with Lindberg as part of an FBI investigation.
Louisiana has a checkered history when it comes to elected insurance commissioners. Three of Donelon’s recent predecessors in the commissioner’s position have served time in prison for crimes committed while in office.
Speaking of North Carolina, state GOP chairman and former congressman Robin Hayes was indicted in April after he also allegedly attempted to bribe commissioner Mike Causey in an effort to ease regulatory pressure on a company owned by a Republican donor.
In Georgia, Governor Brian Kemp signed an executive order in mid-May to suspend Beck after Beck sent a letter indicating he would suspend himself following the indictment.
“It will unfortunately be necessary for me to spend a significant amount of my time defending myself against these false charges,” Beck wrote. “Preparing for that trial will be a significant distraction from my public duties.”
Beck pleaded not guilty to the charges in May.
