“Operation Phoenix” – Five Individuals Charged in Insurance Fraud Scheme
Law enforcement officials announced the charges made against five individuals in relation to a multi-million-dollar insurance fraud scheme that lasted through the past several years, and which victimized fire victims throughout the City of Chicago, and the suburban Cook and DuPage counties.
The five defendants facing charges include a Burr Ridge couple, a north suburban lawyer, and a Burbank currency exchange owner with his employees. The arrests of the Burr Ridge couple and the north suburban lawyer culminate the “Operation Phoenix” – a six-month-long investigation with collaborative efforts of different law enforcing agencies, including the Cook County State’s Attorney’s Office, the Cook County Sheriff’s Police, the DuPage County State’s Attorney’s Office, the Westmont Police, the U.S. Postal Inspectors, and the National Insurance Crime Bureau.
Tad Christensen, 40, along with his wife, Donna Christensen, 37, and their partner-in-crime Eric Ferleger, 53, are charged with Class X Felony with a possible penalty of up to 30 years in prison.
Cook County State’s Attorney Richard A. Devine expressed his forewarning to individuals engaged in fraudulent schemes. “The leaders of this fraudulent scheme face very serious consequences-up to 30 years in prison-for their ripoffs. This investigation should warn similarly minded con artists who prey on the vulnerable that we will pursue them and prosecute them to the fullest extent of the law,” State’s Attorney Richard A. Devine said.
On September 21, 2005, authorities carried out search warrants in five locations, specifically:
- The Christensen’s home: 7719 Drew, Burr Ridge
- The law firm of the Ferleger & Associates: 29 S. LaSalle St., Chicago
- The Action Fire Restoration offices: 120 Burlington Ave., LaGrange
- The board-up company offices owned by the Christensen: 8901 Odell Ave., Bridgeview
- The State Road Currency Exchange: 6322 W. 87th St., Burbank.
It is suspected by the police that large insurance checks were cashed by the Christensen and their employees at the State Road Currency Exchange to avoid proper reporting procedures. On the same day, both Ferleger and the Christensen were arrested. The north suburban lawyer was found in his home that Wednesday morning. In contrast, the Burr Ridge couple was arrested within a couple of minutes following the arrest of Ferleger, near the I-55 entrance ramp and County Line Road.
The Burr Ridge Couple are owners of multiple businesses that focus on providing board-up and restoration services following home fires, including their main business called “Action Fire Restoration,” which is well-known around Chicago and south suburban villages for having rotating call-out lists for board-ups after home fires. The three defendants were reported to have been pressuring homeowners at the fire location to sign a legal agreement with Action Fire involving the home restoration, under the false pretense that the management will be able to complete the house repair within 90 days.
“These offenders preyed on their victims when they were at their most vulnerable – suffering the traumatic loss of their home and other valuables. We hope these arrests send a message to those who attempt to profit from the misfortunes of others – we will catch you and use all our resources to punish you accordingly,” Sheriff Michael F. Sheahan said, also sending a notice to individuals who engage in fraud.
Investigations revealed that there were numerous cases in which the Action Fire company did not deliver according to the contract signed, which resulted in having homeowners deal with legal matters and incomplete repairs of their homes. Furthermore, it was noted that the Action Fire had allegedly submitted false invoices to insurance companies, as well as forged checks for deposit and placed a lien on the property for the amount of the insurance check cashed with the help of their co-conspirator, Eric Ferleger.
During the search warrants executed in September of 2005, a cache of more than three dozen weapons was recovered from the home of the Christensen, which were reported to amount to more than $1 million that they did not need a mortgage for. The Christensen also owned three luxurious cars, which are now being evaluated for seizure under a new Illinois law. Business records were also recovered from the other locations in which a search warrant was carried out.
DuPage County State’s Attorney Joseph Birkett asserted that his office would work towards the indictment of criminals. “These defendants are alleged to have financially exploited people whose homes and personal belongings were destroyed by fire-in many instances by acts of arson. To prey on such tragedies is despicable, and we will use every resource to seek the appropriate punitive and financial consequences against these defendants.”
The “Operation Phoenix” was able to conduct further investigations and was able to identify over 20 victims within the Cook County and DuPage County. Fraud schemes that victimized Cook County residents include:
- A March 2003 fire, which extensively damaged an Oak Forest condo complex. The Christensen had promised to the unit owners that restoration of their homes would be completed within three months; however, the job was left incomplete, made with inferior materials, and extended up to six months of labor. Along with the substandard quality of work, the Action Fire deposited nearly $240,000 worth of insurance that was illegally signed, to account for repairs that were never actually completed. After which, the company sent a letter of completion to the condo association and demanded an additional $19,000 charges in debt. The homeowners refused to sign the letter of completion and also refused to pay for the additional charges, to which the Action Fire responded with a lawsuit against the association.
- A January 2004 fire severely damaged the second floor of a woman’s South Side home, which also caused major water damage to the first floor of the house. The woman was victimized by two men from Action Fire and coerced her into signing with the company, who reluctantly agreed later on. The Action Fire employees used tactics involving bribing the son of the victim with drugs, and aggravate the relatives of the victim as they visit the house. Six months after the contract signing, the Action Fire sent a letter of completion to the homeowner, which the victim refused to sign as she found the work of Action Fire substandard and incomplete. It was also reported that there were unfinished and missing items from the house, including an antique door, and toilets and sinks that were never replaced. Action Fire filed a lawsuit against the woman for $135,000, two months after she refused to sign the letter of completion for their contract.
- A February 2004 home fire damaging a South Side house. The victim signed a contract with the Action Fire after being promised numerous upgrades among her replacements in the damages in the house. After signing with the woman under false pretenses, the Action Fire did not begin the renovations until nearly seven months later and showed substandard and inferior overall work. With the same tactic employed in the past year, the company forged a $46,000 worth of insurance, and when the victim refused to sign, the Action Fire threatened the victim through a series of phone calls. The company’s co-conspirator, Ferleger, has also sent out a letter of mechanics lien to the victim, threatening with foreclosure and eviction from her property unless she signed the check for release.
Four authorized companies that served as subcontractors of Action Fire has also sent their complaints, to which the authorities of Cook County are conducting further investigations on. The companies all claimed that the subcontractors were never given their payment, which amounts to about $630 to nearly $37,000, for their work under the Action Fire. There were also at least three occasions in which it was noted that the Action Fire falsified bills from the companies claiming additional work to insurance companies in an attempt to increase reimbursement fees.
Cook Circuit Court Judge Kevin Sheehan set the bond for both Tad Christensen and Donna Christensen on September 23, 3005 at the Central Bond Court, for $1 million and $350,000, respectively. Under the Criminal Money Laundering Act – a new law proposed by Cook County State’s Attorney Richard A. Devine that was enacted in the Summer of 2005, prosecutors shall seize the assets of the Burr Ridge couple.
A co-conspirator, Eric Ferleger, also had his bond set, on the same day, at $250,000 by Cook County Circuit Court Judge Laura Sullivan, and is assigned to appear in next court date on October 13, 2005.
The two other individuals charged under the “Operation Phoenix” were the owner and the employee of the Burbank currency exchange, who allegedly collaborated with the Christensen. The owner of the Burbank currency exchange, Ronald Nagler, 63, is from 15502 S. LeClaire Ave., Oak Forest. Nagler, along with his employee – Mary Ann Biske, 64, of 6214 W. 83rd Pl., Burbank, were both charged with money laundering and structuring.
Similarly, Cook Circuit Court Judge Kevin Sheehan set the bond for Nagler and Biske at $500,000 and $175,000, respectively. The two employees of the Burbank currency exchange, along with the Burr Ridge couple, are set to appear in their next court date on October 14, 2005.
Victims of the Action Fire Restoration company is highly recommended to report their concerns to the National Insurance Crime Bureau at 1-(800) 835-6422.
Updated: September 2, 2020