3 Nebraska Insurance Execs Sent to Prison for Investment Scheme

Three people, including two principals of an insurance firm, who were convicted in a fraudulent Nebraska investment scheme have been sentenced to prison and ordered to make restitution of more than $16.6 million.

The three were sentenced in U.S. District Court in Lincoln.

Stella Levea and James Masat, both of Grand Island, were given eight years and a month in federal prison. Kenneth Mottin, of St. Libory, was given five years. They must serve three years of supervised release after leaving prison.

Levea and Masat were the principals of First Americans Insurance Service, which had been under investigation since a 2009 bankruptcy filing. Mottin, who worked for them, pleaded guilty last June to charges of mail fraud.

The insurance licenses of Levea, Masat and Mottin were revoked in 2009 by then Department of Insurance Director Ann Frohman.

First Americans filed for bankruptcy protection in January 2009 claiming between $100 million and $500 million in liabilities. The agency previously told the department and state Department of Banking it had about $4.3 million in debt and was in shape to keep paying promissory note holders and keep their business going.

The agency, incorporated in 1980, touted services to American Indian tribes in more than 20 states on its Web site.

A related company, First Nations Compensation Plan, provided workers’ compensation coverage to sovereign nations and tribal organizations. Although not part of the bankruptcy, First Nations sent notices to customers in April 2009 warning them to seek a new insurance company.

Nebraska Attorney General Jon Bruning has compared First Americans’ dealings to a Ponzi scheme in which investors are promised high returns and early investors are paid with money from later investors.