James Evans of Jackson received numerous late notices and several policy cancellations in 2006 despite being current on his car insurance premiums.

The culprit, according to Jackson County prosecutors, was his insurance agent, Kenneth Powers.

Dozens of local motorists reported they were left without insurance or overpaid on premiums. Eleven former clients and a former employee testified Friday at Powers' preliminary hearing.

He is charged with five felonies, including insurance fraud, embezzlement and false insurance certification.

Assistant Prosecutor Everett Perry alleges Powers, who owned Powers Insurance Agency on North Street, accepted payments for insurance policies and did not forward all of the money to Progressive Insurance Co.

"Another four or five insurance companies were involved, but only Progressive did the stand-up thing and covered most of the more than $100,000 Powers shorted them on policies," Perry said. "Progressive even covered claims where clients could prove they paid him."

Typical of those with complaints, Evans said he paid premiums to Powers on time but would be pestered by late notices and policy cancellations from Progressive.

"At one point my fiance and I realized we had no insurance on a 1998 Ford Windstar for six months," Evans testified.

Some said they paid six months or a year up front to save hundreds of dollars, then were charged extra for paying monthly.

Others complained that Powers advised them to pay for their own car repairs if they were at fault in a crash or if their deductible was high in relation to the repairs.

Defense attorney David Goldstein characterized such advice as prudent and part of what insurance agents do.

"That is advice I think is good advice," Goldstein remarked when former client Carrie Hair testified Powers advised her not to make a claim on a family-owned snow-removal truck that hit a parked car.

He advised paying the $2,200 repair bill or risk higher premiums or cancellation.
Jessica McCormick, who worked for Powers in 2006, said checks and cash for premiums were handed to Powers in almost all cases. All three of his employees could make bank deposits, but only Powers controlled the money, she said.

Even though she was an employee and made her car insurance payments on time, she also received late payment notices, she said.

Perry alleges Powers, 49, would alter checks, crossing out Progressive and writing in Powers Insurance, and that he kept hundreds of thousands in premiums.

McCormick said Powers "has no banking abilities" and was a sloppy bookkeeper.

"Would you say 'chaos' described his accounting system?" Goldstein asked her.
"That is an understatement," she said.

Powers closed his office in August, when he was charged with bilking clients.

District Judge Joseph Filip will continue the preliminary examination on Feb. 29.

Representatives from Progressive, a local bank and a Jackson insurance office that took over Powers' accounts in late 2006 are expected to testify for the prosecution.

Source : http://www.mlive.com/