TRENTON – Like father like son, and in this case the pair both received sentences for orchestrating a plot to defraud life insurance companies out of $4 million.
Attorney General Gurbir S. Grewal announced that the Monmouth County men had received their sentence for engaging in the fraudulent scheme where they unlawfully issued free life insurance policies to people and recouped millions of dollars in fraudulent commissions on those policies from various insurance companies.
Frank Pescatore, 73, of Asbury Park, was sentenced to three years in State prison by Superior Court Judge Lourdes Lucas in Monmouth County on February 8. He pleaded guilty to second-degree insurance fraud on December 3, 2020 and was subsequently sentenced as a third-degree offender under a plea agreement.
The Attorney General commented, “Frank Pescatore will serve time in prison for his lead role in a scheme that defrauded the insurance system of millions for his personal gain. His crimes not only involved issuing policies that should not have been issued and that lapsed prematurely, but are also the type of offenses that contribute to higher insurance costs in the long run for all of us.”
“This sentence sends a strong deterrent message that we will hold accountable those that cheat the system,” Grewal added.
Pescatore’s son, Evan Pescatore, 38, of Highlands is a former life insurance agent. He was sentenced to three-years of non-custodial probation on the same day for participating in the scheme. He pleaded guilty to third-degree insurance fraud on December 3, 2020.
The two men pled guilty to defrauding the insurance companies in a scheme to provide high-value life insurance policies at no cost to applicants in order to obtain commissions from the eight insurance companies. Their scheme involved 18 policies – with face values totaling $61.5 million which were caused to be issued by the insurance companies in the scheme.
“Rebating,” a process of providing applicants and insureds with an inducement to apply for life insurance policies by paying their premiums is prohibited by the insurance industry, as well as by state law.
According to an estimate by the FBI, the total cost of non-medical insurance fraud is more than $40 billion per year, costing the average U.S. family between $400 and $700 per year in the form of increased premiums.
Acting Insurance Fraud Prosecutor Tracy M. Thompson said his office “will continue to pursue these cases to protect the integrity of New Jersey’s insurance industry. These crimes affect every policy holder who must pay higher insurance costs to cover the losses suffered by insurance carriers.”
According to Thompson many important cases have started with an anonymous tip. Those concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.