COLONIAL CASUALTY IN TROUBLE

A Travis County Grand Jury handed down indictments to a Texas couple alleging that the two stole over $1 million from Colonial Casualty Insurance Company, a workers compensation insurance company based in Dallas. The Travis County District Attorney’s office said Walter Edward Neuls and Deidra Ellen Neuls were charged with misapplying fiduciary property of over $1,000,000, and were indicted for making a false statement in writing to the Texas Department of Insurance. The Neuls, husband and wife, are both officers of Colonial. The indictment charges the Neuls with looting the company to pay personal expenses and lying about the amount of money owed by the company. A Travis County court recently found Colonial to be insolvent and placed it in receivership. The company owes more than $8 million in unpaid claims. Misapplication of fiduciary property of $200,000 or more is a first degree felony with a possible punishment of 5 to 99 years or life in prison and a fine of up to $10,000. It is also alleged that the Neuls intentionally misstated the amount of Colonial’s losses, claiming it to be $21,721,481.00 when in fact they knew it was more than that. The Texas Department of Insurance (TDI) has requested bids for a special deputy receiver to handle Colonial Casualty’s business. A TDI spokesman said the company had a book of business that “got away from them” and Colonial Casualty ended up owing more for claims than it could pay for. Once TDI closes the bid process for the special deputy receiver, the interview process is expected to take about two to three weeks.