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Former insurance broker must pay fraud victims $1.8 million, DA says

Kimberly Graziano of Middle Island, was sentenced in

Kimberly Graziano of Middle Island, was sentenced in Riverhead on fraud, grand larceny and other charges on Tuesday, Sept.19, 2017, said Suffolk County District Attorney Thomas Spota. Credit: SCDA

A former insurance broker was sentenced to between 3 and 9 years in prison after pleading guilty to grand larceny and fraud, Suffolk County District Attorney Thomas Spota said Tuesday.

Kimberly Graziano, 44, of Middle Island, who owned and operated Islandia-based K.A.G. Insurance Brokerage Inc., must also pay $1.8 million in restitution to her victims.

Prosecutors said Graziano, through her company, defrauded clients and several insurance carriers such as Progressive Insurance Company, MetLife and Tudor.

Suffolk officials said Graziano falsified contracts by inducing Alliance Premium Funding Corp. in Floral Park into financially backing policies for her corporate clients, without ever actually purchasing insurance coverage for them.

Graziano and K.A.G. Insurance Corp. pleaded guilty to nine charges of grand larceny, first-degree scheme to defraud, three counts of second-degree criminal possession of a forged instrument, fifth-degree insurance fraud and a violation of state insurance law.

Investigators discovered nearly 30 forged financing contracts totaling more than $1 million in stolen funds from Alliance Premium, prosecutors said.

In another scheme, Graziano collected premium payments and falsified insurance cards and certificates of liability insurance coverage to convince her customers they had insurance coverage, when they, in fact, did not.

“Her schemes began to unravel when her clients’ vehicle registrations were suspended by DMV(s) for lapses in insurance coverage, and claims made on commercial insurance policies were being denied by the insurance carriers for lack of a policy,” Spota said in a statement.

Despite not renewing her license for K.A.G. in 2015, her business continued operating, engaging in illegal schemes that victimized dozens of towing companies, truck operations and snow removal businesses.

Many of them lost business and were issued DMV fines as well as tens of thousands of dollars in fines for operating without valid workers’ compensation coverage.

“This broker violated the trust of the companies she defrauded and also the good faith of her clients, who believed she was providing insurance coverage for their vehicles,” New York State Department of Financial Services Superintendent Maria T. Vullo said in a statement.

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