Insurance License Revoked After Conviction for Wire Fraud

Post number 5327

Insurance Agent Complains When He Loses License After Convicted of Wire Fraud

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In Susan Ochs, Commissioner, New Jersey Department Of Banking And Insurance v. Robert W. Mania, and Heidi Ann Mania, and RHM Benefits, Inc., No. A-3346-23, Superior Court of New Jersey, Appellate Division (April 15, 2026) Robert W. Mania, along with Heidi Ann Mania and RHM Benefits, Inc., were subject to a final agency decision issued on May 22, 2024, by the Commissioner of the New Jersey Department of Banking and Insurance (DOBI). The Commissioner revoked Mania’s insurance license and imposed a $16,012.50 penalty for violations of the Insurance Producer Licensing Act (IPLA), specifically N.J.S.A. 17:22A-40(a).

FACTUAL BACKGROUND

Mania appealed the decision, challenging the validity and severity of the sanctions.

Robert was a licensed insurance producer in New Jersey operating through RHM Benefits, Inc. (“RHM”), an entity which he co-owned with his wife, Heidi Ann Mania.

Between 2007 and 2009, Robert and his former employer, Frank Cotroneo, participated in a scheme to increase the brokerage commission rate on the health insurance policy, specifically by surreptitiously diverting a portion of the commission rate to Robert to reimburse him for a debt Cotroneo owed Robert. The scheme involved diverting 1% in commissions through RHM’s bank account. Pursuant to this scheme, Robert received approximately twenty-one checks totaling $141,527 through RHM, which he concealed from the insurer by using his official position to avoid disclosure by directing the funds to his personal post office box.

The scheme eventually came to the attention of the United States Attorney (“U.S. Attorney”) for the District of New Jersey. On July 2, 2012, Robert entered into a plea and cooperation agreement with the U.S. Attorney, under which he agreed to plead guilty to one count of mail fraud in violation of 18 U.S.C. §§ 1341 and 1342.

An administrative law judge (“ALJ”) issued an initial decision granting summary decision in DOBI’s favor on all four counts of the Order To Show Cause why his license should be revoked.

The ALJ concluded that Robert’s reporting obligation was triggered upon his awareness of the impending charges, requiring notice within thirty days of executing the plea agreement, not the filing of formal charges, and determined that DOBI proved the violation by a preponderance of the credible evidence.

The ALJ also found that Robert’s undisputed mail fraud conviction established a crime involving dishonesty, supporting discipline under N.J.S.A. and determined that his failure to obtain a waiver and continued licensure warranted a finding that DOBI proved the violation by a preponderance of the credible evidence.

LAW

Mania contended that several counts in the administrative order to show cause should be dismissed due to the expiration of the statute of limitations, the doctrine of laches, and the entire controversy doctrine.

DISCUSSION AND ANALYSIS

Mania believed the Commissioner should have imposed lesser sanctions. The Commissioner, however, maintained that the violations were significant enough to warrant both license revocation and a substantial financial penalty, and that the doctrines cited did not preclude enforcement.

CONCLUSION

The Appellate Division reviewed the arguments regarding procedural bars and the appropriateness of the penalties. While Mania sought a reduction in sanctions and dismissal of some counts, the Commissioner’s decision to revoke the license and impose the penalty was upheld, reflecting a strict interpretation of the IPLA and the penalty framework. The court emphasized the importance of regulatory compliance and found no error in the application of legal doctrines or penalty factors.

ZALMA OPINION

When a licensed insurance broker pleaded guilty to wire fraud based on a scheme to defraud an insurer and its insureds lost his license by order of the New Jersey Department Of Banking And Insurance. Unhappy, Mania appealed the order only to have an appellate court refuse his appeal and keep a criminal from serving insurance buyers in the state.

(c) 2026 Barry Zalma & ClaimSchool, Inc.

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