MIAMI -- Insurance executive James E. Charge is being held without bail in a Miami jail after his arrest on federal charges that he used an offshore insurance company to bilk California policyholders of $22 million between 1991 and 1993.

A federal grand jury has indicted Mr. Charge and an associate, John H. Nellmapius, on multiple conspiracy and fraud counts related to their operation of the now-defunct West Point Insurance Co. of Antigua.

The indictment alleges that the two men conspired to submit a series of bogus West Point financial statements to California insurance regulators, reporting millions of dollars of assets that were essentially worthless.

Mr. Charge also made fraudulent Securities and Exchange Commission filings for Indemnity Holdings Inc., a company West Point controlled, prosecutors allege.

West Point continued to collect premiums from California policyholders for six months after it had agreed with state insurance regulators in 1993 to stop writing business in the state. The insurer later collapsed, leaving about $6.9 million in unpaid California claims, the indictment says.

Mr. Charge, an Australian national residing in the United Kingdom, was arrested Aug. 8 at John F. Kennedy International Airport in New York. He was later transferred to Miami, where a federal magistrate on Sept. 30 ordered him held without bond, citing a risk he might flee.

At a hearing last Wednesday, Mr. Charge pleaded not guilty to the allegations, and a federal public defender was appointed to represent him. He continues to be held without bail, according to the court clerk's office.

Mr. Charge's court-appointed lawyer could not be reached.

Mr. Nellmapius, who operated London-based companies in the early 1990s, has not been arrested and has no lawyer representing him. He could not be reached.

Mr. Charge is no stranger to controversy: He was identified in 1991 Senate subcommittee hearings on insurance fraud as one of two men who tried to obtain a Delaware license for the now-defunct Victoria Insurance Co. Victoria was later licensed in Georgia and was managed by the late insurance swindler Alan Teale.

At the time of his arrest, Mr. Charge was operating Colonnade Insurance Co. A.V.V. of Aruba, which wrote stop-loss coverage for a California health plan that the U.S. Department of Labor shut down in August (BI, Aug. 17). The Labor Department charged that Colonnade is "not financially secure."

Federal prosecutors obtained their indictment of Mr. Charge and Mr. Nellmapius last year, but the indictment remained under seal until Mr. Charge's arrest.

Prosecutors accuse the two men of conspiring to manufacture a series of bogus West Point financial statements over a two-year period during which the insurer defrauded commercial trucking and automobile policyholders of $22 million.

When regulators questioned a particular financial statement's valueless assets, the two men would produce a revised statement showing new assets that likewise proved worthless, the indictment says.

Mr. Charge obtained a number of these assets from Buckingham Gardner Management Ltd., a London-based company that owned holdings in several purported Africa-based businesses, according to the indictment.

Buckingham Gardner's main holding was in African Resources P.L.C., a U.K. corporation of which Mr. Nellmapius was chief executive officer, documents show. African Resources in turn owned interests in other companies, including Luxembourg Estates Co. and Sierra Leone Resources P.L.C.

None of Buckingham Gardner's holdings had any market value, the indictment alleges. Sierra Leone Resources, for example, owned rights to mine an undeveloped bauxite deposit at Port Loko, Sierra Leone, a project that would have required at least $100 million in start-up capital, the indictment notes.

Between July 1991 and February 1993, West Point paid Buckingham Gardner about $1.4 million for the use of these assets, prosecutors say.

In an initial fraudulent financial statement in 1991, Messrs. Charge and Nellmapius falsely reported that West Point owned a Florida Keys resort property worth more than $15 million, prosecutors charge.

Within six months, they had produced two more phony financials in which the resort property was replaced by purported holdings in African Resources, Luxembourg Estates and Sierra Leone Resources, according to the indictment. West Point also claimed to own a stake in Continental American Industries Inc., a company the insurer had unsuccessfully negotiated to buy and did not in fact own, the indictment charges.

West Point went on to generate two more false financial reports in 1992, one of which listed stock in a company called Anglo Resource & Technology Corp. that was purportedly worth $20.3 million but actually was worthless; and the other of which falsely reported a $21.4 million holding in stock of a company called Intercell Corp., according to the indictment.

As part of the fraud, Messrs. Charge and Nellmapius conspired to pay an accountant "to subvert his professional judgment by falsely certifying four of the financial statements that West Point would submit to California," according to the indictment.

The indictment does not identify the accountant.

It also alleges that Mr. Charge made a series of false financial filings with the SEC for Indemnity Holdings, a company West Point had acquired. One of these filings reported that Indemnity Holdings owned stock in Luxembourg Estates and Sierra Leone Resources worth $30 million, the indictment says.

Messrs. Charge and Nellmapius are charged in the indictment with one count of conspiracy and 19 counts of wire fraud. Mr. Charge is also named in 30 counts of money laundering, most of them based on West Point payments to Buckingham Gardner bank accounts for use of Buckingham Gardner's "assets."