---

Amscot Owner Ordered Out Of Insurance Business

17 August 1998

Amscot Owner Must Get Out Of Insurance Business, Says Florida Department of Insurance

    TALLAHASSEE, Fla., Aug. 14 -- An auto insurance agency with
18 offices around the state has pleaded guilty to racketeering for its part in
various fraudulent insurance practices, including a sales abuse known as
"sliding."
    Insurance Commissioner Bill Nelson and Statewide Prosecutor Melanie Ann
Hines announced Friday morning that Amscot Insurance Inc., along with four
agents and a manager, have now pleaded guilty in Tampa in a scheme involving
deceptively selling customers products they didn't want or know they were
getting, such as towing and legal services.
    State Division of Insurance Fraud investigators probed the practice in
Florida for months before referring their findings to Hines and the Statewide
Grand Jury focusing on insurance fraud. When indictments were announced in
March, it was revealed that one of the Amscot employees allegedly sold
unwanted extras to the insurance commissioner.
    Nelson, who oversees state insurance fraud investigators, wore a wire and
bought car insurance under his own name from an Amscot office in Tampa,
investigators said. They said the agent is alleged to have deceptively sold
him a towing and car rental add-on. Charges are pending against the agent, as
well as 24 other current or former Amscot employees indicted with the company
last spring.
    Also Thursday, Amscot owner Ian Mackechnie was removed for life from the
insurance business, including ownership in Amscot and another business that
finances insurance premiums. In exchange, prosecutors agreed not to pursue
criminal charges against the Tampa Bay-area businessman.
    Amscot pleaded guilty to racketeering and will be placed on probation for
six months, during which time Mackechnie must sell the company to an unrelated
third party. A plea agreement also bans Amscot agents who sell an auto policy
from selling ancillary products, like auto club memberships. Those products
will have to be sold by another employee.
    As for the five Amscot employees who previously entered guilty pleas, they
did so to various organized fraud-related charges. They also agreed to testify
for the prosecution.
    "Today's developments deal a heavy blow to anyone in the insurance
industry who would contemplate ripping off auto insurance consumers," Nelson
said Friday.