Fake Storage Tank Insurance Busted in Michigan

A fake underground storage tank insurance scheme in Michigan was revealed several months ago, when EPA and FBI agents managed to infiltrate the two-man operation and put a halt to the scheme. Learn how the scheme worked and what the state did in the aftermath in this week’s blog.

Michigan storage tank leaks

Fake Storage Tank Insurance Busted in Michigan

The two insurance agents were based in Lansing, Mich., and created and sold fake insurance certificates to owner/operators of storage tanks throughout the state. In Michigan, storage tank owners are required to prove that they have the financial means to clean up a leak and the resulting environmental contamination. Proof of storage tank insurance is considered sufficient documentation for this financial assurance.

The main consumers of the fake certificates were owner/operators of gas stations who had underground storage tanks that were too old or in too bad of a condition, making them too expensive to ensure. The owners purchased the fake insurance to serve as proof to the state that they had financial assurance, and avoid having to replace the aging tanks. In reality, they had no real insurance.

EPA and FBI agents caught on to the scheme and infiltrated it through undercover operations. Both men pled guilty in federal court to fabricating insurance certificates. “Federal law prohibits altering or fabricating documents with the intent to impede, obstruct or influence the proper administration of any matter that is within the jurisdiction of a federal agency.” The maximum penalty for this offense is 20 years in prison.

After the scheme was discovered, the state took action. From cspnet:

Immediately upon disrupting the scheme, the EPA and the State of Michigan sought to identify which USTs were not in compliance with the financial assurance requirements to mitigate the risk of harm to the environment. Gas stations that failed to present a genuine insurance policy were shut down until the owner or operator demonstrated compliance with the law.

To learn more about the state’s program for cleaning up underground storage tank leaks and mitigating environmental damage, read our blog How Michigan is Dealing with Underground Storage Tank Leaks.

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This entry was posted on Friday, April 10th, 2015 at 1:04 pm . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.