According to a US Department of Justice news release, Foley sold policies to approximately 10 client companies directly that were not considered commission policies, yet caused the underwriting department of UnumProvident to name a friend as the broker of record on the policy at a certain commission level, though there was actually no broker involved. Foley received 90% of the commission paid to his friend and would alter paperwork furnished to the client by removing the name of the broker and the amount of the commission paid.
The release said, because of this scheme, Foley caused losses to UnumProvident of over $6 million. Foley also pled guilty to making false statements on and knowingly covering up and failing to disclose facts on a document, with respect to a policy with Helena Chemical Company.
Foley faces a maximum penalty of 25 years in prison and a $500,000 fine when sentenced.
A sweeping probe of insurance industry practices began by New York Attorney General Eliot Spitzer in 2004 has resulted in changing business processes and settlements in which companies have agreed to disclose broker pay (See Processes Changing in Wake of Spitzer Insurance Probe ).
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