Ex-businessman admits guilt in fraud case

Myron 'Mike' Felt reaches plea agreement in money laundering

In a plea agreement that calls for no prison time, former Bigfork businessman Myron "Mike" Felt admits to wire fraud and money laundering.

Felt, 77, is charged with defrauding insurance companies and others of more than $400,000 through his work as president of Crop Hail Management Inc. The crimes took place between June 2001 and April 2003, according to the federal indictment against Felt.

Felt entered a not-guilty plea Tuesday before U.S. Magistrate Leif "Bart" Erickson in Missoula, though he has an agreement with the U.S. Attorney's Office in Missoula to admit to the crimes. The not-guilty plea is only procedural, because the magistrate cannot accept guilty pleas.

A change-of-plea hearing likely will be held in three to six weeks before Chief U.S. District Judge Donald Molloy.

The plea agreement provides for Felt to serve no prison time. Molloy is not bound by the agreement.

Felt admits that he had the management firm issue crop-hail insurance policies for farmers on behalf of insurance companies, then keep the premiums that many of the farmers paid.

When farmers made claims on the policies they thought they had, Felt would have the firm submit the claims to insurance companies as if the claims were on policies for which the companies had received premiums.

Felt turned himself in to the state Auditor's Office before an investigation had begun in the matter. He was accompanied by his Missoula attorney, John E. Smith.

The wire-fraud charge comes from an e-mail from Felt in December 2002 to an insurance company in Topeka, Kan.

The money-laundering charge is based on an August 2002 check for $60,000 that was involved in unlawful activity.

The two charges carry a maximum penalty of 20 years and a $250,000 fine each, plus as long as three years of supervised release.

Restitution to the victims is mandatory. The victims are insurance companies, managing agencies of insurance companies, reinsurance brokers and state insurance departments. No farmers reportedly suffered losses because of the scheme.

The plea agreement says that no more charges will be brought against Felt or any employees of the management company.

Assistant U.S. Attorney Kurt Alme said that after Felt changes his plea to guilty, Molloy will decide whether he will accept it. If he does, he likely will set a sentencing date for later this summer.