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AssuredPartners accuses ex-employees of setting up captives, skimming


AssuredPartners Inc. has filed suit and obtained a preliminary injunction against former employees whom, it charges, set up captives for clients, then skimmed off a portion of the premiums.

The brokerage said former employee Scott Reese and members of his team moved insurance policies of existing AP partners into an insurance captive, then diverted a large portion of the revenue generated to Mr. Reese’s own pocket, according to the lawsuit filed in U.S. District Court in Eugene, Oregon, on May 10 in AssuredPartners of Oregon, LLC, d/b/a Alliance Insurance Group & Alliance Senior Living v. G. Scott Reese, Susan Reese, Carl Swan, Alex Whippel, & S&S Investments Management LLC.

The lawsuit charged that under their scheme, captive participants and the captive manager were told that, because AP was not properly licensed, all future correspondence should go to Mr. Reese’s personal email address rather than his AP email address.

He then would enter into an “independent consulting agreement” between himself personally and the captive entity, or between his single-member limited liability company, S&S, and the captive entity, to receive at least 10% of the premiums at issue.

This generated hundreds of thousands of premiums to Mr. Reese, his wife, Ms. Reese, and “presumably” to his fellow defendants Mr. Swan and Mr. Whipple, the lawsuit said.

The lawsuit said once the captive was set up, Mr. Reese continued to use AP personnel, sources and confidential information to service the captive’s needs “expecting to again collect 10% of the premium at the time of renewal to AP’s detriment.”

AP said the scheme was uncovered after the broker questioned whether there was a way for it to be compensated for the services it was performing on future captive deals.

It said Mr. Reese and two minority business partners had sold his business, Alliance Insurance Partners Inc. and Quality Risk Management Services LLC, to it in an asset purchase agreement in October 2015 for $21.5 million.

Mr. Reese, Mr. Swan and Mr. Whipple had been working as producers for AP, specializing in providing insurance products and services to senior living facilities, while Ms. Reese had worked as a senior account executive, performing essential support functions to the three men. They are no longer employed by the brokerage.

Charges against the defendants include civil conspiracy, breach of fiduciary duties, breach of contract, violation of the Defend Trade Secrets Act, misappropriation of trade secrets, tortious interference with existing and prospective business relations and unjust enrichment.

On May 18, AssuredPartners, Scott Reese, Susan Reese and S&S Investments Management agreed to a preliminary injunction calling for the defendants to turn over all documents, material and data relating to AP’s business, and refraining from using or disclosing confidential information to any third party, among other orders. Defendants Carl Swan and Alex Whippel did not agree to it and are not subject to the injunction.

Defense attorney Arden J. Olson, a shareholder with Harrang Long Gary Rudnick P.C. in Eugene, said in a statement, “This case arose out of a misunderstanding caused by less than optimal communication within a company. Scott Reese did not intend to harm AP, and is in the process of attempting to resolve with AP all issues related to the matter. My clients are not interested in trying the case in the press, but want it known that they vigorously disagree with any allegation that they behaved dishonestly." 

AssuredPartners had no comment.

In February, a federal district court judge Wednesday agreed to make permanent a temporary injunction issued in poaching litigation filed by AssuredPartners against a competitor and five departed employees.