TRENTON – Attorney General Gurbir S. Grewal and the Office of Insurance Fraud Prosecutor announced that a Bergen County woman was sentenced to four years in prison today for filing phony insurance claims for losses she purportedly sustained during Superstorm Sandy, and for filing a false bankruptcy application to shed $175,000 in debt.

Katreecea Cline, 49, of Elmwood Park was sentenced in accordance with a plea agreement reached when she pleaded guilty to two counts of second-degree insurance fraud and one count of second-degree fraud by insolvency on February 13. The sentence was handed down by Superior Court Judge James J. Guida in Bergen County.

“Today’s sentencing makes it clear that we will not allow individuals to undermine the integrity of the insurance system, especially in the aftermath of a natural disaster like Superstorm Sandy,” said Attorney General Grewal. “Fraudulent claims not only steal money meant to cover legitimate losses, they force genuine victims to wait longer for their claims to be processed.”

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. Cline collected a total of $53,800 on those fraudulent claims.

“We will continue to investigate and pursue harsh punishment for insurance cheats who illegally profit from catastrophic events,” said Acting Insurance Fraud Prosecutor Tracy M. Thompson. “We want to send a message of deterrence that will reduce this kind of criminal conduct in future emergencies.” 

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 have been dismissed.

Deputy Attorney General Jennifer Menjivar represented the State at sentencing. 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 Thompson noted that some 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.

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