Tuesday, October 6, 2020

Des Moines, Iowa - On September 17, 2020, Ming Xun Zheng (a.k.a. Kellerman Jason Zheng) was sentenced by the United States District Court in Massachusetts after pleading guilty to one count each of Mail Fraud and Wire Fraud.  The sentence comes after Zheng pled guilty in February to a scheme in which he applied for over $11.5 million in life insurance and accidental death coverage on his deceased brother.

Following the guilty plea, Zheng was sentenced to 15 months in federal prison followed by 3 years of supervised release.  Zheng was also ordered to pay $49,084.21 in restitution and a $200 special assessment by the court.

The investigation into Zheng’s actions began following a complaint made to the Iowa Insurance Division’s Fraud Bureau in late 2018 by an Iowa domiciled insurer.  This complaint alleged Zheng had filed a claim against a term life insurance policy seeking a one million dollar payout as a result of the death of his brother.  Further investigation by the Iowa Insurance Division’s Fraud Bureau discovered over twenty insurance companies who received fraudulent applications for life insurance insuring the life of Zheng’s previously deceased brother.  Zheng’s insurance claims under these policies exceeded $5 million across the United States.   Zheng placed three of the policies with Iowa domiciled insurance companies.  These policies had a combined death benefit amount of $2 million.

The Iowa Insurance Division’s Fraud Bureau contacted the United States Postal Inspection Service to assist with coordinating the investigation with the Federal Bureau of Investigations Boston Field Office.

“As innovation in underwriting techniques makes the insurance buying process more convenient for consumers, fraudsters will look at ways to take advantage,”  Iowa Insurance Commissioner Doug Ommen said.

During the course of the scheme which began in 2016, Zheng obtained falsified Chinese medical and mortuary records that indicated a different date of death, opened a bank account and a private mailbox in Florida in his deceased brother’s name, and renewed his deceased brother’s driver’s license online to support the policies.  Zheng claimed his brother died while on a trip to China in 2018, nearly 3 years after his brother’s actual death in 2015.  Zheng admitted his actions to an undercover agent who posed as a claims manager willing to assist in the scheme.

Throughout the application process, Zheng intentionally took steps during the life insurance underwriting processes in order to avoid exposing his scheme of posing as his deceased brother.  Zheng intentionally sought to avoid certain underwriting requirements that likely would have exposed his scheme.  During the claims process, Zheng submitted falsified documents and misrepresented travel dates to support the story of the trip as well as submitted forged statements from his parents to back up the details of the supposed death.

“Once funds are paid out, it’s very difficult to get them back from a scammer.  Our office appreciates insurers coming forward to report fraud, as early intervention by law enforcement helps stop fraudulent payments,” Ommen said.  “I’d like to specifically thank the United States Attorney’s Office in the District of Massachusetts, the Federal Bureau of Investigation, and the U.S. Postal Inspection Service for their efforts and resources to successfully investigate this case.”

The full press release from the United States Attorney’s Office District of Massachusetts can be found here: https://www.justice.gov/usao-ma/pr/boston-man-sentenced-life-insurance-fraud-scheme

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