Local attorney charged in multi-million-dollar fraud case - Toledo News Now, News, Weather, Sports, Toledo, OH

Local attorney charged in multi-million-dollar fraud case

CLEVELAND -- Gregory A. White, United States Attorney for the Northern District of Ohio, announced Wednesday that an indictment was filed against Toledo attorney Darrell M. Crosgrove.

The indictment alleges that from June 2001 through March 2004, Crosgrove, 46, conspired with others to defraud thousands of real estate agents and appraisers throughout the United States out of more than $3 million in connection with the operation of two Toledo-area organizations: the American Real Estate Association and the Noble Group.

The indictment alleges that the conspiracy to defraud real estate agents and appraisers began in 1997 and that Crosgrove entered the conspiracy in June 2001. Crosgrove and his co-conspirators allegedly falsely represented that if real estate agents and appraisers paid membership dues and fees to AREA and Noble Group they would be covered by an Errors and Omissions insurance policy issued by the Midwest Insurance Company.

A further allegation in the indictment is that Mark Haukedahl, a co-conspirator, created Midwest Insurance Company as a foreign shell corporation and that no Errors and Omissions insurance policy actually existed.

The indictment also alleges that Crosgrove and his co-conspirators used member dues and fees to pay small amounts on the claims made on the nonexistent Midwest Insurance Company Errors and Omissions policy, falsely represented these payments came from Midwest Insurance Company, then intentionally failed to pay the full amount of the members' claims.

The indictment alleges that for the first year he took part in the conspiracy, Crosgrove represented to AREA and Noble Group members that he was either an attorney for AREA or Nobel Group or that he was the Corporate Counsel for Midwest. The indictment further alleges that in mid-2002, Crosgrove instructed AREA and Noble Group employees not to inform AREA and Noble Group members he worked for AREA or the Noble Group, that he created a fictitious attorney/claims administrator named John Thomas, and that he caused letters signed by the fictitious John Thomas to be sent to AREA and Noble Group members to deceive them into believing insurance coverage existed and their insurance claims were being properly processed.

The indictment also charges Crosgrove with conspiring to commit promotion money laundering by allegedly using proceeds of the alleged fraud scheme to keep the American Real Estate Association and Noble Group operating and to pay his legal fees.

The indictment also alleges that Crosgrove must forfeit $387,200 to the United States.

If convicted, the defendant's sentence will be determined by the Court after review of factors unique to this case, including the defendant's prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the minimum.

The investigating agencies in this case are the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division. The case is being handled by Assistant United States Attorney Seth D. Uram.

An indictment is only a charge and is not evidence of guilt. The burden of proof is always on the government to prove a defendant guilty beyond a reasonable doubt.

Posted by PJS

 

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