Virginia Accountant Sentenced to 64 Months in Prison for Social Security, Life Insurance Fraud

James C. Cilenti, 47, of Leesburg, Va., was sentenced today to 64 months in prison, followed by three years of supervised release, for carrying out a fraud scheme to fraudulently obtain life insurance proceeds and for aggravated identity theft in connection with a related Social Security fraud scheme. He was also ordered to pay $465,748 in restitution.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Michael L. Chapman, Loudoun County Sheriff, made the announcement after sentencing by United States District Liam O’Grady.  Cilenti pled guilty on Nov. 3, 2011.

According to plea papers, Cilenti conspired to defraud USAA Life Insurance Company out of the proceeds of a $500,000 life insurance policy on the life of Cilenti’s late wife.  Although Cilenti was the primary beneficiary of the policy, because the Loudoun County Sheriff’s Office identified Cilenti as a person of interest in his wife’s death, the insurance company declined to pay the proceeds to him.  As a result, Cilenti and his attorney concocted a scheme to lie to the insurance company in order to fraudulently obtain the life insurance proceeds for Cilenti.

According to court documents, after being identified as a person of interest in his wife’s death, Cilenti disclaimed any interest in the $500,000 life insurance proceeds so that Cilenti’s then-minor adopted daughter could claim the benefits.  Cilenti then retained a Leesburg attorney to create a trust for the benefit of Cilenti’s adopted daughter for which the attorney acted as trustee.  Cilenti and his attorney falsely represented to the insurance company that Cilenti would neither have control of, access to, nor benefit from the insurance proceeds deposited in the trust.  As a result, the insurance company paid over $500,000 in insurance proceeds to the adopted daughter’s trust. 

Cilenti’s daughter, according to court papers, did not know that she was the beneficiary of her mother’s $500,000 life insurance policy or that a trust was created in her name.  In fact, within weeks of the insurance company wiring $507,000 to the trust account, Cilenti’s attorney wrote over $400,000 in checks and wire transfers to Cilenti.  Cilenti spent almost all the funds from the trust account, very little if any of which benefited his adopted daughter.     

Shortly after the life insurance fraud scheme, unbeknownst to his adopted daughter, Cilenti also applied for Social Security survivor benefits on her behalf, forging her signature and using her Social Security Number without her knowledge or permission.  Cilenti then spent on himself approximately $7,600 in Social Security survivor payments made to him on his adopted daughter’s behalf.

In a related matter, Christopher Agresto, 37, of Leesburg, Va., pled guilty on Nov. 4, 2011, for his role as Cilenti’s attorney in the conspiracy to commit life insurance fraud. Sentencing is scheduled for Feb. 24, 2012.

This investigation was conducted by the FBI’s Washington Field Office, Loudoun County Sheriff’s Office, the Social Security Administration Office of the Inspector General, and the Commonwealth Attorney’s Office.  Assistant United States Attorneys Uzo Asonye and Michael Rich prosecuted the case on behalf of the United States.  James C. Cilenti, 47, of Leesburg, Va., was sentenced today to 64 months in prison, followed by three years of supervised release, for carrying out a fraud scheme to fraudulently obtain life insurance proceeds and for aggravated identity theft in connection with a related Social Security fraud scheme. He was also ordered to pay $465,748 in restitution.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Michael L. Chapman, Loudoun County Sheriff, made the announcement after sentencing by United States District Liam O’Grady.  Cilenti pled guilty on Nov. 3, 2011.

According to plea papers, Cilenti conspired to defraud USAA Life Insurance Company out of the proceeds of a $500,000 life insurance policy on the life of Cilenti’s late wife.  Although Cilenti was the primary beneficiary of the policy, because the Loudoun County Sheriff’s Office identified Cilenti as a person of interest in his wife’s death, the insurance company declined to pay the proceeds to him.  As a result, Cilenti and his attorney concocted a scheme to lie to the insurance company in order to fraudulently obtain the life insurance proceeds for Cilenti.

According to court documents, after being identified as a person of interest in his wife’s death, Cilenti disclaimed any interest in the $500,000 life insurance proceeds so that Cilenti’s then-minor adopted daughter could claim the benefits.  Cilenti then retained a Leesburg attorney to create a trust for the benefit of Cilenti’s adopted daughter for which the attorney acted as trustee.  Cilenti and his attorney falsely represented to the insurance company that Cilenti would neither have control of, access to, nor benefit from the insurance proceeds deposited in the trust.  As a result, the insurance company paid over $500,000 in insurance proceeds to the adopted daughter’s trust. 

Cilenti’s daughter, according to court papers, did not know that she was the beneficiary of her mother’s $500,000 life insurance policy or that a trust was created in her name.  In fact, within weeks of the insurance company wiring $507,000 to the trust account, Cilenti’s attorney wrote over $400,000 in checks and wire transfers to Cilenti.  Cilenti spent almost all the funds from the trust account, very little if any of which benefited his adopted daughter.     

Shortly after the life insurance fraud scheme, unbeknownst to his adopted daughter, Cilenti also applied for Social Security survivor benefits on her behalf, forging her signature and using her Social Security Number without her knowledge or permission.  Cilenti then spent on himself approximately $7,600 in Social Security survivor payments made to him on his adopted daughter’s behalf.

In a related matter, Christopher Agresto, 37, of Leesburg, Va., pled guilty on Nov. 4, 2011, for his role as Cilenti’s attorney in the conspiracy to commit life insurance fraud. Sentencing is scheduled for Feb. 24, 2012.

This investigation was conducted by the FBI’s Washington Field Office, Loudoun County Sheriff’s Office, the Social Security Administration Office of the Inspector General, and the Commonwealth Attorney’s Office.  Assistant United States Attorneys Uzo Asonye and Michael Rich prosecuted the case on behalf of the United States.