More Charges to Come, Prosecutors Say
On September 3, Terrill D. “Terry” Beebe, signed a plea agreement in a Seattle Federal Court, admitting to “Conspiracy to Commit Mail Fraud, Wire Fraud and Embezzlement from a Health Care Benefit Program, in violation of Title 18, U Code, Section 371,” according to the prosecutor’s information filed with the case. The charges were part of the ongoing investigation of the Philip Harmon-National Friends Insurance Trust Case, code-named “Operation Island Scam.”
Beebe, 41, is Harmon’s son-in-law. He was ordered to pay $7,111.699.92 in restitution, and will be sentenced later to a prison term which could be up to five years, plus a fine of up to $250,000. Formal sentencing is expected in November.
Beebe admitted to sending letters to state insurance authorities in Kansas and Iowa which falsely described the trust as a legitimate insurance plan, which it was not. Instead, Harmon, Beebe and others operated the Trust, in the prosecutor’s words, as an “outlaw insurance company,” stealing the premiums and avoiding payment of many claims.
Beebe also admitting sending similarly false information to the administrator of the North Carolina Yearly Meeting of Friends, many of whose staff were at one time covered by the phony plan. They, along with several hundred others, were left without insurance when the Trust collapsed in early 1997.
In addition, Beebe admitted to diverting numerous checks from the insurance trust accounts to his own personal benefit.
Besides these items, however, Beebe played a much larger role in the entire Harmon family criminal enterprise. For instance, he helped bring investors into the Harmon retirement plans. The most prominent among his “clients” was his mother, Norma Beebe, who, at his urging, invested $115,000, which was almost all of her inheritance from her late husband Richard, with Harmon’s companies.
Richard Beebe was a very prominent member o the northwest evangelical Quaker community: he served as presiding Clerk for Northwest Yearly Meeting for many years, and after his death a building was named in his honor at George Fox University.
His widow’s $115,00 was lost, as was an estimated $16 million in other retirees’ nest eggs. Losses in the health insurance plan fraud are now estimated at over $7,000,000.
Phil Harmon and his associates used the stolen funds to support a lavish lifestyle of houses, beachfront condos, a large yacht, numerous antique cars and other luxuries. However, when authorities seized these properties, virtually all of them were found to be mortgaged, often for more than their actual value. In July , Phil Harmon began serving an eight-year sentence at a federal prison in Oregon.
Beyond the minimal specifics of the indictment, Beebe’s services for Harmon extended to fielding complaints from worried insurance plan subscribers, whose medical bills were being paid increasingly late or not at all, reassuring them — falsely — that the plan was sound and that all their claims would be paid.
The federal prosecutor who brought the complaint, Jeff Coopersmith, told local reporters that there were nine more persons who are the objects of the ongoing investigation. Names of the other targets were not released, but speculation centers on two persons in particular: Steve Harmon, Phil Harmon’s son, who also was heavily involved in the Harmon enterprises; and Maurice Roberts, formerly the Superintendent of Mid-America Yearly Meeting. Roberts was a key Harmon employee in the company’s final years.
Federal authorities in Seattle say they hope to recover some of the insurance plan’s losses through negligence suits against third-party companies the Harmons did business with. Any such recoveries will likely be a long time coming.