Politics & Government

County filed insurance claim, property loss notice after fraud

Eagle file photo

Sedgwick County officials filed an insurance claim and a property loss notice within a week of discovering it had lost more than half a million dollars to fraud, according to records obtained by The Eagle.

The county also was asked for an employee’s personnel file in connection with the claim after fraudulent activity cost the organization $566,088.90 in October.

The Eagle requested the county’s communications with its insurance companies after the fraud was discovered by county financial staff members on Oct. 25.

Here is information gleaned from what the county released in 112 pages of documents.

▪ By the afternoon of Oct. 27, the county had set up a claim including information describing the cause of the loss. The claim was assigned to an employee with insurance company Zurich North America.

▪ On Oct. 28, county risk manager Mick McBride filed a property loss notice to Lexington Insurance Company for loss by theft. He described the loss or damage in that document.

▪ On Oct. 31, Zurich’s Helen Rasmussen asked McBride whether the loss was “a failure by an employee to faithfully perform duties as prescribed by law,” according to another document. McBride sent Rasmussen a proof of loss on Nov. 15.

▪ On Nov. 21, Rasmussen asked McBride to send her e-mails, wire transfer documents and a narrative of the facts of the claim. She also asked for “a copy of the employee’s personnel file” and “a copy of the statute or law that your employee failed to comply with.” McBride replied with the information Rasmussen requested on Dec. 6.

Sedgwick County did not release to The Eagle information on how the loss occurred. That information in the forms was redacted or withheld by the county, which cited an exemption in the Kansas Open Records Act for the ongoing investigation by the sheriff’s office and the FBI.

Release of this information at this point in time would interfere with the pending criminal investigation.

Michael North, assistant county counselor

“It is the opinion of our department after conferring with the Sheriff’s Office that release of this information at this point in time would interfere with the pending criminal investigation,” Assistant County Counselor Michael North wrote to The Eagle.

McBride had previously written that the county was trying to find out what “specific information the insurance company will require when a claim is filed.”

“I expect that we will be required to provide a complete description of the circumstances beginning with the vendor change information up through the loss discovery,” McBride told chief financial officer Chris Chronis in an Oct. 26 e-mail.

I expect that we will be required to provide a complete description of the circumstances beginning with the vendor change information up through the loss discovery.

Mick McBride, Sedgwick County risk manager

The insurance documents say the loss occurred on Oct. 7. That’s the same day the county sent an electronic payment through the automated clearing house to Wichita construction company Cornejo and Sons.

The county confirmed that payment never reached Cornejo and Sons. The company was later issued a check for its work on a road project on 53rd Street North between Andale and Maize.

County public information officer Kate Flavin said on Tuesday there were no new updates on the status of the insurance claim. And she said any internal discipline of county personnel related to the fraud incident was not public record.

“There’s nothing new to report with that either,” she said.

Daniel Salazar: 316-269-6791, @imdanielsalazar

  Comments