The owner and operator of an unlicensed prize insurance company who for years avoided paying claims, ignored cease and desist orders, and has been convicted of illegal sales or theft more than once has pleaded guilty to fraud.
Kevin Kolenda of Norwalk, Connecticut this week pleaded guilty to wire fraud in federal district court, according to David X. Sullivan, U.S. Attorney for the District of Connecticut. Kolenda’s jury trial was set to begin on September 23. The federal charges against him were brought in April 2024.
During the years Kolenda engaged in his illegal conduct, neither Kolenda nor his entities were licensed to sell insurance products and a number of state insurance departments issued cease and desist orders in an effort to stop him, warnings that Kolenda ignored. Since 2011, he has been convicted four…
MANAGEMENT & CULTURE (THE “TONE AT THE TOP”)
Fraud thrives in “sloppy” environments where leadership ignores the rules.
- The Fraud Triangle: For fraud to occur, three elements must be present: Pressure (the need for money), Rationalization (thinking “I deserve this”), and Opportunity (weak controls). You can only control the Opportunity.
- Whistleblower Hotline: Provide an anonymous way for staff to report “odd behavior.” Most internal frauds are caught via tips, not audits.
- Background Checks: Conduct credit and criminal record checks for all employees in financial or data-sensitive roles.
- Annual Ethics Training: Make sure every staff member knows that the company has a Zero Tolerance policy toward “borrowing” from petty cash or fudging overtime.