Former Melfa insurance agent pleads guilty to wire fraud

A former Eastern Shore insurance agent pleaded guilty Friday to wire fraud in a scheme that federal prosecutors say allowed him to fraudulently obtain approximately $164,345.

Thomas Robert Hoyt, 32, of Melfa, admitted collecting insurance premium payments from clients and using the money for personal expenses instead of forwarding it to insurance carriers, according to the U.S. Attorney’s Office for the Eastern District of Virginia.

Court documents state that Hoyt contracted with insurance carriers to sell their products and served as an intermediary between the companies and policyholders. For some policies, clients paid their premiums directly to Hoyt after he represented that he would forward the money to the carriers.

The Virginia Bureau of Insurance began investigating Hoyt following complaints from clients and contacted him in June 2021. On Sept. 9, 2021, Hoyt signed an agreement permanently surrendering the insurance licenses held by him and Hoyt Insurance.

Hoyt subsequently sold his book of business to a small independent insurance agency. Prosecutors said he falsely claimed that all premiums owed on the policies included in the sale had been paid and that no investigations were pending.

The purchasing agency made a down payment of $27,282.28. After reviewing the accounts, however, the agency discovered that many of the policies had lapsed or had never taken effect because the required premiums had not been paid to the insurance carriers.

The Bureau of Insurance referred the case to the U.S. Postal Inspection Service in August 2022. Investigators determined that Hoyt repeatedly assured clients they had valid coverage while diverting their premium payments for personal use.

A review of Hoyt’s bank accounts showed that approximately half of the money flowing into his business was diverted for personal expenses, including significant cash withdrawals, prosecutors said.

Hoyt is scheduled to be sentenced Dec. 10. He faces a maximum penalty of 20 years in prison, although the federal judge will determine the sentence after considering federal guidelines and other statutory factors.

Assistant U.S. Attorney Rebecca Gantt is prosecuting the case. The case is filed in the U.S. District Court for the Eastern District of Virginia under case number 2:26-cr-74.