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$27.4 Million Award in Liberty Interest and Deceit Claim Causing Incarceration
A South Dakota jury awarded an insurance salesman who was convicted of mail fraud $27.4 million in a lawsuit that alleged deceit and breach of fiduciary duty, causing his incarceration.
Eugene Kent began selling health insurance in 1990 to a South Dakota association of bankers. He offered the policies through United of Omaha Life Insurance. An investigation by state authorities concluded the policies violated state law, and both Kent and United of Omaha were penalized by a state agency.
In 1995, Kent was indicted on 60 counts. He was acquitted on 58 counts; the heart of the case alleged he misappropriated funds through the mail. He was convicted in two counts of mail fraud, and he spent two yeas in jail as a result of the convictions.
While awaiting sentencing, Kent was escorted out of United of Omaha’s officers. He was attempting to obtain receipts to show the checks, totaling $330,000, were the basis of the charges that were sent by United of Omaha via UPS and not the U.S. Postal Service. The judge also refused to subpoena the records.
Through a habeas petition, Kent obtained dismissal of the charges by subpoenaing the records and proving the checks were sent via UPS. Of note, the law has been changed to include UPS and Federal Express deliveries as mail fraud.
Kent’s lawsuit blamed the loss of his insurance license on United of Omaha’s failure to be truthful with South Dakota authorities. He also claimed United of Omaha was responsible for his imprisonment for failing to disclose the shipping receipts.
The jury found for Kent on both the fiduciary duty and deceit counts in a September 7, 2005 verdict. It awarded him $2 million in lost wages, $900,000 for future economic loss, $7 million for loss of liberty, and punitive damages of $10 million for the liberty interest and $7.5 million for loss of his insurance license.
Kent did receive his insurance license again, and he also received a six-figure settlement in a claim alleging his trial counsel was ineffective for failing to subpoena the shipping records. See: Kent v. United of Omaha Life Insurance, USDC, S. Dakota District, Case No. 4:02-4214.
Eugene Kent began selling health insurance in 1990 to a South Dakota association of bankers. He offered the policies through United of Omaha Life Insurance. An investigation by state authorities concluded the policies violated state law, and both Kent and United of Omaha were penalized by a state agency.
In 1995, Kent was indicted on 60 counts. He was acquitted on 58 counts; the heart of the case alleged he misappropriated funds through the mail. He was convicted in two counts of mail fraud, and he spent two yeas in jail as a result of the convictions.
While awaiting sentencing, Kent was escorted out of United of Omaha’s officers. He was attempting to obtain receipts to show the checks, totaling $330,000, were the basis of the charges that were sent by United of Omaha via UPS and not the U.S. Postal Service. The judge also refused to subpoena the records.
Through a habeas petition, Kent obtained dismissal of the charges by subpoenaing the records and proving the checks were sent via UPS. Of note, the law has been changed to include UPS and Federal Express deliveries as mail fraud.
Kent’s lawsuit blamed the loss of his insurance license on United of Omaha’s failure to be truthful with South Dakota authorities. He also claimed United of Omaha was responsible for his imprisonment for failing to disclose the shipping receipts.
The jury found for Kent on both the fiduciary duty and deceit counts in a September 7, 2005 verdict. It awarded him $2 million in lost wages, $900,000 for future economic loss, $7 million for loss of liberty, and punitive damages of $10 million for the liberty interest and $7.5 million for loss of his insurance license.
Kent did receive his insurance license again, and he also received a six-figure settlement in a claim alleging his trial counsel was ineffective for failing to subpoena the shipping records. See: Kent v. United of Omaha Life Insurance, USDC, S. Dakota District, Case No. 4:02-4214.
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Related legal case
Kent v. United of Omaha Life Insurance
| Year | 2005 |
|---|---|
| Cite | USDC, S. Dakota District, Case No. 4:02-4214 |
| Level | District Court |
| Conclusion | Jury Verdict |
| Damages | 27,400,000.00 |
| Injunction Status | N/A |