Former Schererville Insurance Agent Sentenced to 70 Months in Prison for Life Insurance Fraud Scheme

HAMMOND - Thomas J. Lemmen, 51 years old, of Schererville, was sentenced by United States District Court Judge Gretchen S. Lund after pleading guilty to wire fraud, announced United States Attorney Adam L. Mildred.

Lemmen was sentenced to 70 months in prison followed by 2 years of supervised release and ordered to pay $1,601,505.27 in restitution to the victims of the offense.

According to documents in the case, Thomas Lemmen worked as a licensed independent insurance agent in the state of Indiana since 2012. Between 2020 and 2022, Lemmen used his position to operate a Ponzi-style fraud scheme that allowed him to profit by writing high volumes of fraudulent life insurance policies. On thousands of separate occasions, Lemmen wrote life insurance policies in the names of current, former, and prospective clients without their knowledge or consent. As part of the policy writing process, Lemmen unlawfully used sensitive information such as his victims' names, dates of birth, Social Security numbers, and details about their family history. Lemmen also forged the digital signatures of the purported applicants on various legal documents, including medical records releases that caused the disclosure of the victims' sensitive medical and pharmaceutical information to the insurance companies. Most of Lemmen's identity theft victims were retirees and elderly residents of Northwest Indiana. Lemmen profited through the commission payments he received each time he wrote a new fraudulent policy. Lemmen also took sophisticated steps to make his fictitious insurance policies appear legitimate and avoid detection for over two and a half years.

In all, Lemmen wrote more than 2,000 fraudulent life insurance policies in the names of hundreds of victims, receiving over $5 million in commissions to which he was not entitled. Lemmen used the proceeds to fund the continued operation of the scheme and for his own personal spending. Among other things, Lemmen spent significant sums on home furnishings and renovations, including on an outdoor pool at his home, and on frequent travel. In April 2023, the Indiana Department of Insurance took administrative action to prevent the renewal of Lemmen's license to sell insurance in the state of Indiana.

"Hundreds of people trusted Thomas Lemmen to write life insurance policies to protect themselves and their loved ones. But he betrayed that trust and fraudulently obtained millions of dollars to which he was not entitled. Thanks to the combined efforts of the FBI, the United States Bankruptcy Trustee for Region 10, and Assistant United States Attorney Zach Heater, the public can see that those who choose to commit fraud will be held accountable," said U.S. Attorney Mildred.

"Lemmen took advantage of his position and ripped off a lot of people - including seniors - just to line his own pockets. He took information people trusted him with and used it against them. These people thought they were protecting their families, and instead, he made them victims," said FBI Indianapolis Special Agent in Charge Timothy J. O'Malley. "The FBI and our partners are on it. We're digging into these complicated fraud schemes, we're following the money, and we're going to chase these cases down. Criminals like Lemmen need to be held accountable."

This case was investigated by the Federal Bureau of Investigation with assistance from the United States Bankruptcy Trustee for Region 10. The case was prosecuted by Assistant United States Attorney Zachary D. Heater.