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For Immediate Release: For Further Information:
February 14, 2018

Office of The Attorney General
- Gurbir S. Grewal, Attorney General
Office of the Insurance Fraud Prosecutor
- Christopher Iu, Acting Insurance Fraud Prosecutor
Media Inquiries-
Lisa Coryell
609-292-4791
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Citizen Inquiries-
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Bergen County Woman Pleads Guilty to Filing Phony Insurance Claims for Superstorm Sandy Losses and Filing False Bankruptcy Application to Shed $175,000 in Debt
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TRENTON – Attorney General Gurbir S. Grewal and the Office of Insurance Fraud Prosecutor announced today that a Bergen County woman has pleaded guilty to filing phony insurance claims for purported losses following Superstorm Sandy. She also pleaded guilty to filing a false bankruptcy application to shed $175,000 in debt.

Katreecea Cline, 49, of Elmwood Park pleaded guilty to two counts of second-degree insurance fraud and one count of second-degree fraud by insolvency in a hearing before Superior Court Judge James J. Guida in Bergen County yesterday. Under the terms of the plea agreement, the State will recommend that Cline be sentenced to four years in state prison.

In pleading guilty, Cline admitted she submitted fake and altered receipts to her insurance company supporting claims alleging that items in her apartment in Elmwood Park, in her son’s dorm room in Harrison, and stored at her brother’s home in Keansburg were damaged as a result of Superstorm Sandy. She collected a total of $53,800 on those fraudulent claims.

“At a time when so many New Jersey residents were suffering the devastating impact of Superstorm Sandy, this defendant used fraud and deceit to cash in on the crisis,” said Attorney General Grewal. “As a result of her guilty plea, the defendant is now facing prison time for illegally siphoning insurance funds in the wake of this catastrophic event.

“Protecting the integrity of the insurance system is especially important in the aftermath of a calamity like Superstorm Sandy, when demands on the system skyrocket,” said Acting Insurance Fraud Prosecutor Christopher Iu. “We will continue to work hand-in-hand with insurance companies to identify fraudulent claims and hold perpetrators accountable for these scams.”

From October 2012 to November 2013, Cline submitted property damage insurance claims to United States Automobile Association (USAA) fraudulently claiming losses resulting from Superstorm Sandy. Over the course of the claim, USAA paid Cline a total of $53,800, the maximum allowable benefit for property damage. On May 9, 2013, Cline again committed insurance fraud by claiming her RV was broken into and numerous pieces of construction equipment and tools stored in the RV, and valued at approximately $20,000, had been stolen. USAA paid $3,000 for that claim.

On November 25, 2012, Cline and her husband Stevie Mitchell signed a United States Bankruptcy Court voluntary petition for bankruptcy. In that application, the couple asserted that they were $209,874 in debt to various creditors and had only $36,905 in assets. Cline admitted that in filing the bankruptcy application, she failed to report that the couple had property interest in the outcome of the USAA claims regarding Superstorm Sandy and that they had a bank account with financial institution Metabank. On February 22, 2013, a federal bankruptcy court judge accepted the couple’s bankruptcy petition and discharged approximately $175,000 worth of debt.

Charges filed against Mitchell in connection with the fraudulent bankruptcy application will be dismissed at the time of Cline’s sentencing, which is scheduled for June 29.

Deputy Attorney General Colin Keiffer represented the State in the plea hearing. Detectives Kahlil McGrady and Kristi Procaccino conducted the investigation with assistance from Detective Sgt. Jarek Pyrzanowski, Detective Megan Flanagan and Detective Terrence Buie.

Acting Insurance Fraud Prosecutor Iu noted that important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.njinsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.

Follow the New Jersey Attorney General’s Office online at Twitter, Facebook, Instagram & YouTube. The social media links provided are for reference only. The New Jersey Attorney General’s Office does not endorse any non-governmental websites, companies or applications.

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