For Immediate Release: February 10, 2012

Two Arrested in Alleged Hurricane Insurance Claim Scheme

RALEIGH -- Insurance Commissioner Wayne Goodwin today announced the arrests of Paul Edward Brown, 69, of 1021 W. Barton St., Greensboro, and Chancey Roscoe Vaughn, 60, of 6041 Burlington Road, Gibsonville; each man was charged with one felony count of obtaining property by false pretense, one felony count of insurance fraud and one felony count of conspiracy.

Criminal investigators allege that Brown and Vaughn conspired to intentionally cause damage to a Halifax County property that Brown partially owned and for which Vaughn was hired to do carpentry as an unlicensed general carpenter. Investigators alleged that Brown then filed a fraudulent wind and water damage claim with North Carolina Farm Bureau Insurance Company, stating that the damage was a result of Hurricane Irene. Brown received $5,000 from Farm Bureau to satisfy that claim.

Brown and Vaughn were arrested by the Guilford County Sheriff's Office on Feb. 9. Brown was released under a written promise to return to court. Vaughn was held under a $4,000 unsecured bond.

The Department of Insurance employs 20 sworn state law enforcement officers dedicated to investigating and prosecuting claims of insurance and bail bonding fraud. Since Insurance Commissioner Wayne Goodwin took office in 2009, criminal investigators have received more than 13,500 complaints, resulting in 575 arrests, 320 criminal convictions, and more than 109 cases currently pending a court appearance. These arrests have resulted in more than $47.9 million in restitution and recoveries for victims.

An estimated 10 cents of every dollar paid in premiums goes toward the payment of fraudulent claims. To report suspected fraud, contact the Department of Insurance Criminal Investigations Division at 919-807-6840. Callers may remain anonymous. Information is also available on the Department of Insurance website.