main menu page title feature menus content footer
My Florida C F O

CFO's Initiatives

Stay Connected

Follow the
Department of
Financial Services

Sign up for the CFO's

Press Release

News   RSS RSS   Press Office   Archive

Gallagher, Posey Announce Felony Charges against Operators of Unlicensed Insurance Entity


Tami Torres or Nina Banister
(850) 413-2842

TALLAHASSEE - Teresa Orr, of Monteverde, Fla., traveled to Tallahassee today to hear the news firsthand that the operators of an unlicensed health insurance plan that left her and her late husband with more than $250,000 in unpaid claims are facing felony charges of selling insurance without a license and racketeering. The unlicensed entity, TRG Marketing, LLC, has also refused to pay claims totaling millions of dollars for more than 7,200 other Floridians.

Since February 2001, investigations by the Department of Financial Services have led to the shut down of 10 unlicensed entities in Florida, administrative actions initiated against about 80 agents and criminal charges against six operators or marketers of unlicensed insurance entities. The latest criminal charges are against Carmelo Zanfei and William Paul Crouse, who operated Indiana-based TRG Marketing, LLC. Bond for Zanfei and Crouse has been set at $1 million each.

The charges are being prosecuted by the Office of Statewide Prosecution. If convicted on all charges, Zanfei and Crouse could each face up to 60 years in prison in addition to fines and restitution.

"These are major victories in our ongoing fight against unlicensed insurance operators who are preying on Floridians," said Tom Gallagher, Florida's Chief Financial Officer and agency head for the Department of Financial Services.

Also today, the "Pete Orr Bill," SB 1680, which increases criminal penalties for individuals who operate an unlicensed insurance entity, will be merged into the Senate's anti-fraud bill, SB 1694, and will be heard at 1:15 p.m. in the Senate Government Oversight and Productivity Committee. Under the Pete Orr Bill, sponsored by Sen. Bill Posey, R-Rockledge, those who peddle their products in Florida would face a first-, second-, or third-degree felony charge of insurance fraud based on the amount of premiums collected. The bill is named after Mrs. Orr's late husband. A former NASCAR-circuit driver, Pete Orr died of cancer last year as TRG refused to pay his health care bills totaling more than $250,000. Rep. Gus Billirakis, R-Palm Harbor, is sponsor of the bill in the House.

"Those responsible for Pete Orr dying with unpaid medical bills piling up around him should be prosecuted to the fullest extent of the law," Posey said. "Passing the ‘Pete Orr' bill will ensure that other scammers and thieves face severe penalties for selling Floridians a false sense of security." The bill also would provide a procedure for policyholders to civilly sue these operators and their unlicensed entities, Posey added.

The insurance agent who led the Orrs to buy the unlicensed insurance, along with 24 other Florida agents who sold the TRG product, should have notices in hand today that they are facing disciplinary action, including possible revocation of their licenses. Among 20 actions sent out last week was one to Anthony Frank Merlino, prinicipal agent of the Miami-based Dardick Agency. State investigators contend that the Dardick Agency was one of the largest promoters of TRG in Florida. Merlino is charged with 42 violations of state law governing his license. Investigation continues into other agents suspected of selling TRG.

The 2002 Legislature passed a law increasing the penalty for a licensed agent selling unlicensed insurance from a first-degree misdemeanor to a third-degree felony, punishable by up to five years in prison. Under Florida law, if an unlicensed insurer fails to pay claims, agents who sold the unlicensed coverage may be held responsible for unpaid claims.

More than 30,000 Floridians have reported being left with unpaid claims as a result of being duped, many by their agents, into buying coverage from unlicensed entities. Because these entities are not licensed in Florida, there are no assurances of their ability to pay claims.

Kevin McCarty, Director of the Office of Insurance Regulation, is continuing to investigate reports of unlicensed entity operations and has noted in the past several months a new trend toward selling worthless medical malpractice insurance to health care professionals in Florida. "The Office of Insurance Regulation has zero tolerance for unlicensed insurance activity in Florida," McCarty said.

Employers, health care professionals and individuals shopping for insurance coverage are urged to check with the department to be sure they are dealing with a Florida-licensed insurance company and a Florida-licensed insurance agent. For the past year, the department has promoted the message "Verify Before You Buy" through television public service announcements and billboards. The Florida Outdoor Advertising Association donated the billboards, located in Miami, Ft. Lauderdale, Orlando, Tampa, Tallahassee and Pensacola.

To check on the license status of a company or agent, consumers should visit or call the Department of Financial Services' Helpline at 1-800-342-2762. The Helpline is available Monday through Friday 8 a.m. to 7 p.m.