BERKELEY COUNTY, S.C.–On Thursday, the Berkeley County School District filed a lawsuit against its ex-chief financial officer, insurance companies and consultants in federal court for what it claims was a “a series of insidious schemes.”
The lawsuit specifically names Hub International Limited, Hub International Midwest Limited, Hub International Southeast (“Hub”); Knauff Insurance Agency, Inc. (“Knauff”); Stanley J. Pokorney (“Pokorney”); and Scott Pokorney (“Scott Pokorney”) along with ex-CFO Brantley Thomas as defendants.
The lawsuit alleges that Thomas and the insurance defendants fully concealed their schemes to defraud school district, and that they were not discovered until after February 6, 2017, when officials from the Federal Bureau of Investigation and Wells Fargo Bank met with BCSD officials and informed was under federal investigation for misappropriation of public funds.
Following Thomas’ termination the very next day, district officials say they learned that over a period of many years, Thomas engaged in a pervasive scheme of corruption, in which he embezzled and misappropriated district funds, demanded and accepted multiple illegal kickbacks, and exposed the school district to exorbitant fees and losses that cost Berkeley County taxpayers tens of millions of dollars.
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According to the lawsuit, among Thomas’ myriad schemes that the district unearthed after the February 2017 meeting with the FBI were those hatched by Thomas in conjunction with Hub; Hub’s predecessor, Knauff; and Pokorney, who served as an officer in both corporations.
The lawsuit states that Pokorney had served as the district’s insurance consultant and broker since at least 1993. During this period, and at least since 2001, Thomas, Pokorney, and other agents of Knauff and Hub conspired and engaged in multiple schemes in which Thomas helped the insurance defendants secure contracts to broker insurance policies for the district and conduct insurance reviews, in exchange for which they paid Thomas illegal kickbacks in the form of cash, expensive hotel accommodations and dinners, and elaborate spa treatments.
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“The Insurance Defendants were eager allies with Thomas, and they were more than willing to breach their fiduciary duties to the District and engage in fraud to garner and maintain the District’s insurance business,” reads the lawsuit.
On December 7, 2017, the United States Attorney for the District of South Carolina charged Thomas with ten counts of Wire Fraud arising out the illegal kickbacks
he received from an insurance agent. Between 2013 and 2016, Thomas is said to have received illegal kickbacks from an insurance agency in
the amount of $32,000.00 in increments of $2,000.00.
Thomas admitted to this recently and plead guilty to the charges.
According to the lawsuit, the conspiracy between the Insurance Defendants and Thomas and the kickbacks paid by the Insurance Defendants to Thomas actually began long before 2013.
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For instance, Thomas has also been indicted on multiple counts of embezzlement by a South Carolina grand jury relating to other nefarious acts committed
by him while he was the District’s CFO. Among the charges listed in the indictment is a count for embezzlement of approximately $22,700.00 in public school funds which asserts that on November 29, 2007, Thomas deliberately caused the Berkeley County School District to overpay a vendor, and then had the vendor send a refund of the overpayment to his home address, upon which Thomas converted the funds to his personal use.
“At a time when resources for public education are scarce and educators are overworked and underpaid, these Defendants intentionally and willfully defrauded the District and its children of precious funds that could have been used to hire new teachers, purchase supplies and equipment, and improve facilities,” the lawsuit reads.
The lawsuit goes on to state that all of the foregoing premiums and fees the school district paid were the result of
the defendants’ fraud, conspiracy with Thomas, and breaches of their fiduciary duties. This ultimately cost the district more than $14 million in excessive premiums and consultant’s fees.
To read the lawsuit in its entirety, click here.
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