Virginia insurance regulators shut down a Newport News, Va., insurance agent and two companies and fined them a total of $280,000 for illegal sales of surety bonds for public works projects in the Tidewater region of the state.
Don Delwyn Tuzo was fined $115,000; his company Genesis Business Group Inc. was fined $115,000 and another company he operates, Genesis Capital Corp., was fined $50,000, according to the Virginia State Corporation Commission Bureau of Insurance.
Regulators filed a show cause order in August 2010 alleging that the companies and Tuzo were selling insurance products without a license and that the products being sold were through an insurance company not licensed in the state.
Authorities said Genesis Capital, which issued the bonds, made false and misleading statements regarding the existence of assets supporting the bonds. Tuzo, according to testimony, said the bonds were backed by land assets.
Tuzo and the companies did not respond to the show-cause order, SCC records show.
At a hearing in the case in October, Larry Beadles testified that in 2009 Tuzo contacted a Virginia firm, B&R Construction Management Inc., with an offer to sell bonds for its state and municipal construction projects, according to case records. Beadles said there were five projects for which Tuzo and the companies sold bonds.
Records show that they included:
- A $1,102,000 performance and payment bond to insurance and protect the Portsmouth Redevelopment & Housing Authority for B&R’s work involving the Jeffry Wilson Housing Project.
- A $713,486 performance and payment bond to insure and protect the City of Portsmouth in connection with B&R’s demolition of Hunt Mapp/Willett Hall for the City of Portsmouth, Va.
- A bid bond of $200,000, and performance and payment bonds of $373,000 for B&R’s construction of a K-9 facility for Virginia Beach, Va.
- A bid bond for $50,000, and performance and payment bonds for $732,616 in connection with B&R’s construction of a visitor center for the Virginia Department of Conservation and Recreation.
- A bid bond for $25,000 for B&R’s bid for the Jarmin Road/Crossways Boulevard site construction project in Chesapeake, Va.
Beadles testified that Genesis Capital was the issuer of the bonds, that Genesis Group was the producer of the bonds and that each bond bore Tuzo’s signature as the authorized representative and attorney-in-fact for Genesis Capital, records show.
State law permits Virginia regulators to impose a fine of $5,000 per offense.
Virginia authorities found Tuzo and Genesis Capital responsible for 23 violations each and Genesis Group responsible for 10 violations.
Va. regulators fine unlicensed surety bond agent, companies $280,000 via IFAwebnews .
No related posts.