South Suburban Residents Tied To Life Insurance Scheme: Feds

CHICAGO — An elaborate life insurance scam nabbed 23 people that spanned multiple states, including several residents from the south suburbs, announced John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. The defendants are accused of participating in a fraud scheme through which they swindled ten life insurance carriers out of at least $26 million in fraudulent benefits.

According to the unsealed court documents, the defendants submitted fraudulent applications to obtain life insurance policies in the names of various individuals, and then convinced life insurance carriers to pay out the benefits, prosecutors said. They did so, Lausch said, by misrepresenting the identity of different people who had died between 2013 and continued until last month.

Prosecutors said in a news release that among the defendants are sets of spouses and, in some cases, their children, as well as an insurance agent who owned a side business that performed medical examinations on applicants for term life insurance policies, officials said.

The indictment seeks forfeiture from the defendants of at least $26 million in alleged ill-gotten gains, as well as nine luxury automobiles, eight Rolex watches, and properties in the Chicago suburbs of Orland Park, Bridgeview, and Burbank.

Chicago-area residents named in the indictment are:

• James Mills, aka “Jamie Montes,” 47, of Oak Lawn
• Ginger Ely, 26, of Oak Lawn
• Joe Rouga, 29, of Oak Lawn
• Mary Bacco, 53, of Bridgeview
• Steve Montega, aka “Fonzie Cerano,” 44, of Orland Park
• Mark Blanca, 30, of Burbank
• Diana Lumas, 30, of Burbank
• Ricky Blanca, aka as “Fonz Ristick,” 48, of Orland Park
• Joe John, 66, of Arlington Heights
• Frank Costello, 44, of Hoffman Estates

The charges in the indictment indicate that the defendants reportedly paid premiums on the obtained policies for two years, at which time the period for contestability expired, which made it more difficult for insurance companies to decline death benefit claims, the news release said.

Fraudulent claims for death benefits would be submitted as the defendants reportedly used records that falsely identified a different deceased person as the insured, according to the indictment. To support the fraudulent claims, the people involved obtained false death certificates in the names of the insureds and made false representations about the deceased person to law enforcement, first responders, medical personnel, funeral home staff, and cemetery employees, according to court documents.

"The fraud scheme charged in the indictment involved an elaborate deception perpetrated against multiple insurance companies for the purpose of financial gain," Lausch said.