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A former Dumas insurance agent faces 52 felony counts in Desha County Circuit Court, accused of withholding customer premium payments for policies that never existed.
Joshua Jackson Smith, 40, was charged Oct. 5 with 49 counts of fraudulent act of insurance, which includes selling insurance without a license and issuing false insurance IDs; two counts of property theft; and a count of scythe in the second degree.
Smith worked as an agent at Desha Insurance Inc., also known as First Arkansas Insurance of Dumas. Desha Insurance was operated by Smith’s father, David A. Smith, who has not been charged.
Desha Insurance closed its offices in mid-September after selling its assets to Everett Cash Mutual Insurance Co. of Everett, Pa., according to the Arkansas Department of Insurance.
Prosecutors say the charges against Josh Smith involve five victims, all farmers, although not all charges apply to every victim.
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In one case, Danny Day Jr. and his son, C. Bradley Day, both of Desha County, purchased insurance from Smith in 2020 for coverage at farms, according to a report by James Kulesa, a department investigator. of Arkansas Insurance, which was filed in Smith’s criminal case.
Between July 2020 and March 2021, the Days paid Smith nearly $100,000 in premiums for their policies, the prosecution alleges.
But when the Days filed five claims totaling about $60,000, the claims were not honored, Kulesa said. “Additionally, they have two lawsuits pending that should have been covered by the police had they existed,” Kulesa wrote.
Smith also provided Danny Day with two proof of insurance cards for a tractor and a trailer, but these were fake, Kulesa wrote.
Kulesa said he interviewed Smith in November 2021. “During the interview, Smith admitted that he had accepted Danny Day’s insurance premiums when there was no insurance policy in place. .
“Smith has admitted that the insurance IDs he issued to Danny Day were fraudulent.”
Smith did not return Arkansas Business messages left on his cell phone. He pleaded not guilty to the charges on November 7. Smith’s criminal defense attorney, Matthew Flemister of Nelson & Marks of Bentonville, did not return a call for comment.
But the court documents provide some insight into the legal issues surrounding Josh Smith.
He started working for Desha Insurance in 2011, earning $40,000 in 2017 and 2018, according to his bankruptcy filing.
In March 2019, Smith was supposed to renew his insurance license, but he didn’t, Kulesa wrote. And without a valid license, he was not legally allowed to sell insurance.
Couple file for bankruptcy
Meanwhile, Smith was facing financial problems. In October 2019, Smith and his wife, Laura Brooke Smith, filed for Chapter 13 bankruptcy reorganization.
The couple listed $182,500 in assets and $210,700 in debt, including $100,000 in debt from student loans.
Shortly after filing for bankruptcy, allegations of wrongdoing surfaced in his handling of insurance policies.
Freddie Bartlett of Dumas thought he took out insurance from Smith in November 2020 for his farm and equipment.
After one of Bartlett’s buildings collapsed in a winter snowstorm, he filed claims with Smith for approximately $100,000. But the claims were never paid.
“I would keep asking why we weren’t paid,” Bartlett told Arkansas Business. “He always had an excuse.”
Eventually, Bartlett contacted the insurance department. “It wasn’t about the money then,” he said.
In December 2021, Arkansas Insurance Commissioner Alan McClain issued a cease and desist order against Smith to prevent him from selling insurance.
Smith “represented himself as an active licensed insurance producer” when he was not, McClain wrote in the order.
Meanwhile, the Days also had issues with Smith.
In November 2021, the Days filed a lawsuit against Smith, his father, David Smith and Desha Insurance, seeking damages and alleging breach of contract and breach of fiduciary duty. The defendants denied the allegations of wrongdoing.
The criminal file indicates that the Days received two insurance certificate cards. But one of them turned out to have an invalid police number, according to the report by Kulesa, the investigator. The other had a valid policy number, but was in another state for another policyholder.
In an affidavit filed Nov. 18, 2022 in the civil case, David Smith said he learned by discovery that there were insurance cards “which appear to be from Joshua Smith’s computer.”
David Smith said his son “was not authorized to do so and the information in these cards is not correct”.
The civil case is pending.
Josh Smith was arrested on October 7 and released on $50,000 bond.
Smith’s jury trial is scheduled to begin April 4 in the Desha County courtroom before Circuit Judge Robert Gibson III.
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