Felt gets prison time in fraud case

By CHERY SABOL

Bigfork businessman also ordered to pay $512,000 restitution

The Daily Inter Lake

Former Bigfork businessman Myron "Mike" Felt was sentenced Friday to 40 months in prison for fraud. He is 77 years old.

U.S. District Judge Donald Molloy also ordered Felt to pay $512,000 restitution and required him to be on supervised probation for three years after he is released from prison.

United States Attorney for the District of Montana, Bill Mercer, said he is happy with the sentence.

Felt earlier pleaded guilty to wire fraud and money laundering related to his business Crop Hail Management, Inc. He was president of the business, which insured farmers in Montana and 14 other states.

Felt has admitted defrauding 23 insurance companies and other businesses and state governments with a scheme that began in 2001 to keep farmers' insurance premiums.

His business issued crop-hail insurance policies to farmers on behalf of other companies. He admits that he kept insurance premiums from some farmers who paid him.

When some farmers filed claims, he paid them out of the premiums he kept. In 2001, after paying the claims that came in, he had about $141,000 in diverted premiums, according to prosecutors.

In 2002, after paying out more claims under the same fraudulent system, he kept about $486,000 in diverted premiums. He used the money to pay creditors and for other personal expenses.

Eventually, the amount of claims outnumbered the premiums Felt had collected. Then, he traded numbers on the fraudulent policies with numbers for legitimate policies and submitted the claims to other insurance companies for payment. Unwitting insurance companies paid about $656,000 for those "flipped policies."

Felt's actions cost 23 insurance companies lost premiums and/or commissions. Two re-insurance brokers and two managing general agencies lost commissions and five states lost premium taxes.

First Assistant U.S. Attorney Kurt Alme prosecuted Felt. The case was investigated by the Montana State Auditor's Office, the Criminal Investigation Division of the Internal Revenue Service, and the FBI.

Mercer said Friday that the prison sentence is appropriate.

"You look at the nature of what he admitted to," Mercer said of Felt. "The loss is a significant factor in terms of what the ultimate sentence will be.

"The only way to deter this type of [crime] and the only way he is justly punished is if the person is incarcerated," Mercer said. "It is the only way we can promote respect for the law."

He applauded the work of investigators and Alme.

Reporter Chery Sabol may be reached at 758-4441 or by e-mail at csabol@dailyinterlake.com