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Insurance agent guilty of fraud

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Posted: Friday, April 30, 2010 12:00 am

HARLINGEN — One of two insurance agents charged with defrauding Valley Baptist Health System last year was found guilty Friday on three counts of fraud while the other was acquitted of all charges, according to court records.

A federal court jury in Houston found Michael N. Swetnam Jr., of Los Fresnos, guilty of three counts of mail fraud, not guilty on one count of conspiracy and not guilty on five other fraud charges, according to court records.

Brent Carter, of Harlingen, was found not guilty on all nine counts against him, according to the records.

A grand jury in June 2009 charged Swetnam and Carter with selling Valley Baptist $4 million in fraudulent hurricane insurance.

Attorneys for Carter, 46 at the time of the charges, argued that their client acted in good faith, meaning he did not knowingly conspire to break the law, nor did he participate in any criminal acts, according to court documents.

"It’s a pretty scary thing when you tangle with the federal government," Mitchell Chaney, a Brownsville attorney representing Carter, said.

Swetnam, 54 at the time of the charges, was released on bail. He and Carter remain the subject of civil litigation with Valley Baptist. Court proceedings for the civil cases were placed on hold until the criminal case was concluded, Valley Baptist attorney Chris Hanslik said.

"The verdict shows that there was a crime committed to defraud the hospital," Hanslik said Friday. "We know that Carter received some of that money."

The indictment alleged that Swetnam exchanged money with Carter as part of a deal with Valley Baptist.

"It’s a troublesome case to handle in a criminal court," Michael Emory Clark, a Houston attorney representing Swetnam said. "The jury had to examine so many different things. I think this would have been handled more properly on civil grounds."

Clark said he thinks there were significant trial errors. He said the language of the insurance policy was "ambiguous."

Prosecutors alleged that Swetnam and Carter met with Valley Baptist officials in Nuevo Progreso, Mexico, in 2006. There, prosecutor said, the two Brownsville insurance agents presented the hospital with an insurance policy covering wind damage.

The indictment alleged Swetnam sent several invoices and documents pertaining to fraudulent insurance premiums through the U.S. mail.

Attorneys involved in the civil case between Valley Baptist and Swetnam and Carter will meet in Brownsville in June, Hanslik said.

Carter has also sued Kansas-based Westport Insurance Corporation and Swetnam Insurance Services in the 404th District Court of Cameron County, according to court records. Carter is asking for Swetnam and Westport to pay for his defense against Valley Baptist’s civil case.

tty scary thing when you tangle with the federal government," Mitchell Chaney, a Brownsville attorney representing Carter, said.

Swetnam, 54 at the time of the charges, was released on bail. He and Carter remain the subject of civil litigation with Valley Baptist. Court proceedings for the civil cases were placed on hold until the criminal case was concluded, Valley Baptist attorney Chris Hanslik said.

"The verdict shows that there was a crime committed to defraud the hospital," Hanslik said Friday. "We know that Carter received some of that money."

The indictment alleged that Swetnam exchanged money with Carter as part of a deal with Valley Baptist.

"It’s a troublesome case to handle in a criminal court," Michael Emory Clark, a Houston attorney representing Swetnam said. "The jury had to examine so many different things. I think this would have been handled more properly on civil grounds."

Clark said he thinks there were significant trial errors. He said the language of the insurance policy was "ambiguous."

Prosecutors alleged that Swetnam and Carter met with Valley Baptist officials in Nuevo Progreso, Mexico, in 2006. There, prosecutor said, the two Brownsville insurance agents presented the hospital with an insurance policy covering wind damage.

The indictment alleged Swetnam sent several invoices and documents pertaining to fraudulent insurance premiums through the U.S. mail.

Attorneys involved in the civil case between Valley Baptist and Swetnam and Carter will meet in Brownsville in June, Hanslik said.

Carter has also sued Kansas-based Westport Insurance Corporation and Swetnam Insurance Services in the 404th District Court of Cameron County, according to court records. Carter is asking for Swetnam and Westport to pay for his defense against Valley Baptist’s civil case.

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