Eight sentenced over $1.2m travel insurance fraud scheme

Eight people have been sentenced for their roles in a long-running travel insurance fraud conspiracy that cost a US travel insurer more than US$1.2 million, highlighting the risks posed by insider fraud and weak claims controls.

According to the US Attorney’s Office for the Southern District of Indiana, the group pleaded guilty to conspiracy to commit mail and wire fraud after submitting 441 fraudulent travel insurance claims between 2016 and 2021, resulting in losses of $1,199,149.32.

The scheme was led by Jennifer Fleener, a former case management supervisor and claims handler at a Houston-headquartered travel insurer with a travel division in Indianapolis. Prosecutors said Fleener exploited her knowledge of the insurer’s claims processes to approve fraudulent claims without secondary review while recruiting colleagues, former employees, family members, and external accomplices to purchase policies and submit false claims in exchange for kickbacks.

Jennifer Fleener was sentenced to 57 months in federal prison, while her former husband, Mike Fleener, received a 48-month sentence for recruiting participants, many based in the Philippines. Six other co-conspirators received prison terms or probation, alongside restitution orders.

One of them, Christopher Perdue, also pleaded guilty to making false statements after lying to FBI investigators and a federal grand jury about his involvement.

“Fraud schemes of any kind erode trust in programmes designed to protect people in times of need,” said Tom Wheeler, US Attorney for the Southern District of Indiana. “These defendants abused their positions and exploited legitimate insurance processes for personal gain, resulting in significant losses.”

The FBI Indianapolis field office investigated the case.