ATLANTA - Channel 2 Action News has learned that Gov. Brian Kemp is calling for the resignation of the state’s insurance commissioner, who is under federal indictment on fraud charges.
The governor sent a letter to Insurance and Safety Fire Commissioner Jim Beck on Wednesday afternoon, saying the indictment handed up against him "severely undermines your ability to fulfill your obligation to the people of Georgia."
The governor ended his letter to Beck by saying, "I ask that you do what is right for our state and step down immediately."
BREAKING: Gov. Brian Kemp calls for GA Insurance Commissioner Jim Beck’s RESIGNATION after 38 count Federal indictment accused Beck of fraud/money laundering. I’ll have a live report in minutes on @wsbtv pic.twitter.com/0JW6WrsYHV— Aaron Diamant (@AaronDiamantWSB) May 15, 2019
The move comes one day after a 38-count federal indictment was filed against Beck, who was elected in November.
The charges stem from Beck's time as general manager of operations for the Georgia Underwriting Association.
Beck is accused of devising a scheme to defraud the association of more than $2 million.
Channel 2 investigative reporter Aaron Diamant was there when Beck turned himself in to federal authorities Wednesday morning and pleaded not guilty in front of a federal judge.
U.S. Attorney BJay Pak showed up to make arguments personally at the arraignment and bond hearing for Beck.
“This is an important case, and we recognize that, and it justifies the United States attorney, the power that’s vested in me to do it,” Pak said. “I want the public to know that we take these allegations very seriously, not just because of who he is, but the power of his office.”
Authorities said Beck used the money from the alleged scheme to fund his election campaign and pay his credit card bills and his taxes.
After Beck pleaded not guilty, Pak argued against a customary signature bond for him.
“When you have signature bond or own recognizance bond, it’s just like your word. It’s like, 'I promise to do something,'” Pak told Diamant.
Pak told the judge the allegations suggest Beck’s word no longer carries any weight.
“If you’re willing to lie to your family and friends, what is that word worth to a stranger? So I felt like we needed to have something secured so he’d live up to his promises,” Pak said.
Diamant spoke with Beck’s legal team as they walked out of court Wednesday afternoon, where attorney Bill Thomas responded to Pak’s comments in court.
“We deny the charges. We’re going to address it in court. And there just simply was no reason for a significant bond this case," Thomas told Diamant.
The judge imposed a $25,000 bond and said Beck cannot leave the state without permission and banned him from conducting business with his former employer, the Georgia Underwriters Association.
GUA CALLS ITSELF A VICTIM
Channel 2 investigative reporter Nicole Carr spent the day Wednesday tracking down the head of the GUA to learn more about Beck's role in the organization.
“The Georgia Underwriting Association is considered to be the victim of this alleged crime,” said Joshua Mosley, the interim general manager of the Georgia Underwriting Association.
The nonprofit helps homeowners get high-risk property insurance. Mosley replaced Beck when he became insurance commissioner last year.
Federal prosecutors claim Beck used his position at the GUA to illegally funnel millions of dollars through companies he had a hand in creating. They say he pulled it off by sending fake invoices to the GUA, defrauding them of $2 million.
“There has been nobody implicated within our organization,” Mosley told Carr.
“I don't know what's true and what's not true. I'm a little in a difficult position because I'm still on the board of directors for the Georgia Underwriters Association,” said David Shafer.
Shafer, a candidate for state GOP chair, told Carr that he was notified six weeks ago of the federal investigation into Beck.
“The association is treated as an alleged victim of this alleged crime and we've been asked not to comment any further because we're cooperating with the ongoing investigation,” Shafer said.
Prosecutors say Beck funded part of his campaign for insurance commissioner with the $2 million he’s accused of funneling.
In campaign finance disclosures, Carr found most of the contributions from beck himself identify him as the general manager of the GUA.
The donations are small in-kind but in one final disclosure, Beck as president of the GUA sends his campaign $250,000, $60,000 and $20,000.
One expert Carr spoke with said those donations can be considered irregular for someone who transitioned from state to nonprofit work as Beck did.
"To be able to leave those positions and raise enough money that you can just contribute a quarter of a million dollars to his campaign, you're either really talented or it's going to raise some red flags,” said former state ethics head Rick Thompson.
Federal authorities have not indicated how much money they believe went to the campaign.
© 2019 Cox Media Group.