Fraudulent Broker Pleads Guilty to Bogus Policy after 20 Drown

You might recall the 2005 tragedy of the Ethan Allen, a boat that took tourists around for a scenic cruise on Lake George in New York. Sadly, back in October of that year, of the 47 elderly passengers on board, 20 drown in a horrible accident. Christopher Purser, the man who owned the company from which the owner of the Ethan Allen purchased their insurance policy, has now pled guilty to insurance fraud.

According to Forbes, back on that terrible day in October of 2005, the Ethan Allen took 47 people out to view the autumn colors and take a scenic tour. After a while, the captain, Richard Paris, saw a large wake from another boat approach the Ethan Allen. He was forced to turn the boat sharply, which in turn caused the passengers to be pushed along the benches to one side of the boat. The wake and the rapid shift in the boat’s center of gravity caused it to quickly overturn.

Companies like the one that owned the Ethan Allen purchase policies to protect their business and provide some compensation to those injured or killed in the event of a tragedy like this. Shoreline Cruises, Inc., The owner of the Ethan Allen, purchased a policy from the company owned by Christopher Purser of Houston, TX. Shoreline paid its premiums and when the accident occurred they immediately went to Purser to report the incident and state their claim.

According to prosecutors, the sinking of the Ethan Allen gave rise to substantial claims against the insurance policy. In response, Purser presented backdated documents to make it appear, falsely, that the policy did not cover the Ethan Allen while the boat was operating on Lake George. In fact, Shoreline Cruises Inc. had purchased exactly that type of coverage. With further digging, it was found that Purser’s company was nothing but a shell company with no assets to cover any insurance claims.

Federal prosecutors also found several other bogus insurance policies from Purser for apartment complexes, condominium associations, bars and restaurants.

Some six years later, on October 5th, Purser pled guilty to insurance fraud in a Houston federal court and could face up to 20 years in prison. Three others have also been charged and their trial is scheduled to begin later this month, where Purser is expected to testify against them.

Having settled with Shoreline Cruises, the captain of the Ethan Allen, and owners of the boat that was believed to have caused the huge wake, the victims are now looking to the State of New York for compensation. An appeals court has stated that the case against the state can proceed.

The victims say that the state was responsible for the inspection of the boat when it certified that it could carry 48 passengers (there were 47 on board). Obviously, something went wrong, and a jury may have to decide if it was the fault of the boat, the captain or the wake.