In a coast-to-coast internet-and-telephone crime spree, alleged forgers who had websites that made them appear to be individual sureties have spread fake Chubb completion bonds across the U.S.
Twenty-two contractors in nine states have lost a total of more than $3 million paid to two men with addresses in Georgia, Florida and Louisiana in the last 18 months. Acting as brokers, the two allegedly forged signatures of a former Chubb executive on bonds made to appear to be from Chubb subsidiaries Pacific Indemnity Co. and Federal Insurance Co.
Based in Warren, N.J., Chubb has been notifying obligees as the company learns of the forgeries but other than that has issued no bulletins or press releases about the matter.
Both operated publicly as individual sureties. Stokeling had been referred to the contractors through various intermediaries and agents, including JLM Risk Management in Atlanta and a Chicago-based individual surety broker who holds insurance licenses in Michigan and Illinois.
Attorneys for JLM and the Chicago broker, who collected commissions for their role, say their clients had no hand in the forgery and were themselves deceived. No-Shows at Court
Neither Campbell nor Stokeling contested the lawsuits filed against them by Chubb, which sought unspecified damages.
Attempts to contact Stokeling and Campbell proved unsuccessful. A woman who answered a home phone number for Stokeling said he "wasn't at this residence" and didn't know where he could be found.
Agents of the Federal Bureau of Investigation have interviewed owners of several of the defrauded companies, the contractors say, but the FBI has not confirmed or denied the existence of an investigation. It is possible, industry sources speculate, that charges related to the fraud have been presented to a grand jury, most likely in the Washington, D.C. area, but there is no way to be sure.
The first known instance of the forged bonds had been issued to a contractor awarded the prime contract on a St. Mary’s County, Md., Navy visitors center and museum earlier this year. Stokeling and Campbell collected a $185,000 premium from that contractor for completion bonds valued at about $5.4 million.
Individual sureties often exaggerate or misrepresent the assets backing their bonds. But the forging of bonds by a Treasury-listed corporate surety, where the forger represents itself as a broker, is a departure from the customary fraud model. According to the National Association of Surety Bond Producers, a professional association, the multiple roles played by individual sureties, sometimes acting as the bond broker and other times as the bond underwriter, is consistent with patterns of fraud in individual surety.
The premiums collected in the last year by Stokeling and Campbell ranged from about $8,000 to $400,000.
According to Chubb's lawsuit, Stokeling and Campell collected one of their biggest total premiums, $399,894.00, from Whitehorn Construction Inc., the website for which describes the company as an 8(a), Native American-owned construction and facility maintenance coordinator based in Lake Elsinore, Calif.
Loran Whitehorn, described by Chubb as the company’s owner, could not be reached for comment. Chubb alleged in its lawsuit that Whitehorn had obtained performance and payment bonds for an airport road project in Pago Pago, American Samoa, from Campbell. Whitehorn wired the payments to Campbell’s account at the Bank of America, 9225 Bay Meadows Road, Jacksonville, Fla. Campbell’s address on the wire transfer is 1855B Copperstone Drive, Orange Park Grove, Fla., according to Chubb.