A Monmouth insurance agent and his parents risk up to 20 years in prison, if convicted of the most serious of charges filed by state investigators in what they characterize as a rebating scheme that cost insurors millions of dollars.

Evan Pescatore, 35 of Highlands, and Frank Pescatore, 70; and Janice Pescatore, 64, of Asbury Park, face counts of first-degree conspiracy to commit money laundering and second-degree money laundering in a grand jury indictment returned April 12.

The insurance broker is also charged with first-degree money laundering. He and his father face second-degree counts of insurance fraud, theft by deception, conspiracy to commit insurance fraud, and conspiracy to commit theft by deception.

According to information from Attorney General Christopher S. Porrino's office, they're accused of recruting buyers for free, high-end life insurance policies, taking out a loan to pay the premiums, and using part of some $4,000,000 in commissions to settle the loans.

Rebating is prohibited by state law, and by the insurance industry. Investigators claim that the Pescatores recruited 13 clients, assuring them that they could sell their policies for profit, and wrote policies connected to eight companies, valued at more than $61,500,000.

Investigators contend that applications submitted to insurors assured that the clients would pay for their own policies, and that the companies paid Evan Pescatore more than $3,000,000 in commissions, plus another $1,000,000 his parents, half of which was transferred to him. Authorities said that they used the commissions to satisfy the loans.

Evan Pescatore took out loans ranging form $15,000 to $582,520 to pay the premiums, investigators allege.

Applications were processed by AXA Equitable Life Insurance Co., Minnesota Life Insurance Co., Lincoln Benefit Life Insurance Co., Allianz Life Insurance Co. of North America, Zurich American Life Insuranc Co., Genworth Life Insurance Co., Royal Neighbors of America, and Banner Life Insurance Co., authorities said.

Christopher Iu, Acting Insurance Fraud Investigator, said in prepared remarks that such schemes initially hurt insurance companies, but then ricochet back to consumers in the form of higher premiums.

First-degree crimes carry possible prison sentences of 10 to 20 years and fines up to $500,000. Second-degree charges are punishable by five to10 year terms and fines up to $150,000. Third-degree offenses carry possible three-to-five-year sentences and fines up to $15,000.

Charges are accusations. Defendants are presumed innocent unless, and until, found guilty in a court of law.

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