Department of Financial Regulation Files Suit Against Captive Insurance Executive and Financial Advisor for Fraud
Complaint Alleges Multi-Million Dollar Fraud Against Policyholders
Montpelier, VT – Today Commissioner Michael S. Pieciak announced the filing of a federal lawsuit against Jasbir Thandi, the former president of Global Hawk Risk Retention Group. The lawsuit also involves several of Global Hawk’s outside professional advisors including its former financial advisor and insurance broker.
Global Hawk is a Vermont captive insurance company providing insurance coverage to its members who are commercial trucking companies all located outside Vermont. The lawsuit alleges the defendants falsified bank documents to conceal the financial condition of the company from the Department of Financial Regulation. This scheme allowed the defendants to continue operating the insolvent company for their own benefit and at substantial risk to its members.
“Our Department will not tolerate financial impropriety of any kind, let alone the severity of the conduct alleged in this complaint,” said Commissioner Pieciak. “This matter demonstrates the rigorous oversight the Department provides to those who engage in our financial marketplaces, in fact, it was the Department’s demand for capital contributions that ultimately led to this filing.”
The complaint alleges Mr. Thandi initiated a scheme to obtain a line of credit by pledging the assets of Global Hawk as collateral and that the line of credit was used for his personal benefit.
This action caused Global Hawk to be become insolvent. Further, it is alleged that Mr. Thandi enlisted the help of his financial advisor to falsify financial documents that were ultimately filed with the Department.
The Department alleges these falsified documents were intended to mislead the Department into believing that Global Hawk remained solvent. For example, Mr. Thandi allegedly overstated contributions that were made to Global Hawk by at least $10 million to conceal the company’s true financial position.
Further, the complaint alleges a pervasive scheme of falsifying bank statements ultimately filed with the Department. For example, Mr. Thandi allegedly made a deposit totaling $300 but represented the deposit as totaling $3,000,000. Similar alleged actions resulted in $9,000,000 in falsely reported deposits in 2018 and a similar amount in 2019. The complaint further alleges that for several years, Mr. Thandi and its insurance broker sold fraudulent Global Hawk insurance policies that were never identified on corporate records and provided no coverage.
“As Vermont continues to be the leading domicile for captive insurers, the Department has zero tolerance for the behavior outlined in the complaint,” said Deputy Commissioner David Provost. “Our job is to look out for the interests of policyholders, whoever they are and wherever they may be.”
Based on these allegations, the lawsuit claims that defendants violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”), breached fiduciary duties to Global Hawk, converted Global Hawk funds to their own use, breached contracts with Global Hawk, and committed fraud. The lawsuit is brought in the commissioner’s capacity as the liquidator of Global Hawk.
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