An insurance agent from Houston has been sentenced to 10 years in prison for pocketing more than $250,000 in customer premiums, the Texas Department of Insurance reported.
TDI said McKinley Shumate, 59, of Houston was sentenced to 10-years in prison for Misapplication of Fiduciary Property in Harris County 180th District Court on Aug.26.
Shumate was a licensed insurance agent who misappropriated over $250,000 from several insurance customers and a premium finance company between 2006 and 2008.
When Hurricane Ike hit Houston in 2008, Shumate had two customers who owned commercial and residential properties damaged by the storm. Because he had taken their premium money but had not purchased insurance for them, these customers had to pay out of pocket for the repairs caused by the storm. The repairs exceeded $200,000 and one of the properties went into foreclosure.
Shumate’s insurance agent license was revoked by the Texas Department of Insurance (TDI) subsequent to the criminal offense.
In addition to the prison term, the Harris County Court recommended that the Texas Department of Corrections order Shumate to pay approximately $469,000 in restitution as a condition of parole.
With the cooperation of the Harris County District Attorney’s Office, the TDI Fraud Unit conducted the criminal investigation.
Source: TDI
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