Salem, MA – Attorney General Andrea Joy Campbell recently announced that the owner of a Gloucester insurance agency has been indicted and arraigned in connection with an alleged embezzlement scheme that left client companies uninsured.
Phyllis Palazzola of Gloucester was arraigned Tuesday in Essex Superior Court on charges of Larceny by Embezzlement Over $1,200 (8 counts), Forgery (2 counts), and Unlicensed Insurance Practice (1 count). Her business, Palazzola Insurance Agency (PIA), was also arraigned on charges of Larceny by Embezzlement Over $1,200 (8 counts) and Unlicensed Insurance Practice (1 count). Judge Kristen Buxton ordered Palazzola released on her personal recognizance.
Prosecutors allege that Palazzola embezzled over $39,000 from customers while working as an insurance producer at Palazzola Insurance Agency between May 2017 and September 2018. Palazzola took one or more payments, after suspension of her insurance broker’s license, from eight individuals, who paid her for their workers compensation insurance. However, Palazzola never bound the insurance policies, despite issuing fraudulent “certificates of insurance” to six of the eight affected businesses.
As a result of a complaint by one of the customers, the Massachusetts Division of Insurance investigated and revoked the insurance producer licenses for both Palazzola and PIA on June 11, 2018, as part of a settlement agreement signed by Palazzola. After the settlement, Palazzola informally transferred ownership of PIA to a family member and continued to work at the business for another 14 months. During that time, prosecutors allege that she forged the signatures of customers on two separate occasions, binding them to insurance premium financing agreements to cover up her previous embezzlement.
In total, the AG’s Office alleges that Palazzola stole $39,010 in premiums from client companies.
If any member of the public believes they may have been victimized by this conduct or has any information relating to others who may have been victimized, they are encouraged to contact the Attorney General’s Office Insurance Fraud Tip Line at 617-573-5330.
This case is being prosecuted by Assistant Attorney General Christopher O’Brien and Investigator Lashauna Craig, both of AG Campbell’s Insurance and Unemployment Fraud Division, with assistance from Victim Witness Advocate Megan Murphy. Investigators from the Massachusetts Insurance Fraud Bureau also aided the investigation.
Source: MA AG’s Office