Florida Jury Hits Insolvent Insurer’s Owners with $76 Million Verdict
The former owners of Aries Insurance Co. are on the hook for millions after a Miami-Dade District Court found them guilty of diverting funds for personal use.
Florida CFO Jeff Atwater said that a Miami-Dade Circuit Court entered a $76 million judgment against former Aries owner Marcos Fraynd and his children Paul Fraynd, Saul Fraynd and Fanny Fraynd.
Aries was declared insolvent in 2002, leaving behind roughly 58,000 policyholders and creditors with unpaid claims. The Florida Insurance Guaranty Association and the Florida Workers’ Compensation Insurance Guaranty Association have paid out more than $165 million to Aries claimants thus far and that figure is expected to top more than $170 million when all claims are resolved.
The jury verdict will repay the guaranty funds for some of their payouts.
In 2006, the state Department of Financial Services sued the former owners and directors of Aries for diverting policyholder premiums and illegally distributing the money for personal use. The department so far has recovered over $20 million from other parties through previous lawsuits.
The company wrote personal and commercial auto and workers’ compensation business.
Atwater said he intends to pursue the new judgment until all the monies are recovered. “This order affirms that financial crimes against our head-working Florida citizens will not be tolerated,” he said.
In 2007, the Fraynds plead guilty to criminal charges and received various sentences for their role in the insurer’s insolvency.
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