Man gets four years in federal prison for insurance fraud in case with Columbia ties
JEFFERSON CITY, Mo. (KMIZ)
A Kansas City man was sentenced Monday to four years in federal prison for his role in a $1.1 million insurance fraud scheme with a former Columbia man.
Michael Stuart Smith, also known as Black Mike, 36, pleaded guilty in federal court in Jefferson City to participating in wire and mail fraud conspiracies. Smith was also ordered by U.S. District Judge Roeseann Ketchmark to pay $40,836 in restitution, according to a U.S. attorney's news release.
Smith's co-defendant, Lawrence C. Lawhorn, 35, formerly of Columbia and now living in Kansas City, pleaded guilty last week. Federal authorities say the two were part of a scheme to bilk insurance companies for false claims related to car crashes.
The conspirators, some of whom received tens of thousands of dollars, would make claims for procedures and keep money that was supposed to go to medical providers, according to the U.S. attorney's office. All but one crash was staged, authorities say.
Lawhorn recruited acquaintances, family members and friends of friends to take part in the staged crashes, according to the U.S. attorney's release.
Smith admitted to taking part in staged crashes on May 12, 2018 and Feb. 27, 2019.
Lawhorn pleaded guilty last week to conspiracy to commit wire fraud, conspiracy to commit mail fraud and aggravated identity theft. He pleaded guilty to wire fraud in a separate case, too.
The 101-page plea agreement lays out nine crashes from 2017 to 2019 that prosecutors say Lawhorn and others were a part of in order to get insurance payouts. The agreement said crash investigators cast doubt on the circumstances of many of the crashes, where first responders would find people on the scene unconscious or complaining of injuries. Lawhorn would work with the others to get insurance payouts based on the crash. Some of the claims ran into six-figure settlements, which FBI agents said Lawhorn helped orchestrate based on text messages and emails agents obtained.
Lawhorn also admitted to obtaining money through the Economic Injury Disaster Loan, a 2020 program in the CARES Act meant for small businesses suffering losses due to the COVID-19 pandemic. The plea agreement said Lawhorn worked with others to send in applications to the Small Business Administration for $10,000 loans supporting nonexistent businesses. At least two applications resulted in $10,000 deposits from the EIDL program, according to the plea agreement.
His sentencing date has not been set.
