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By John Jansen
Russell (Rusty) DelGrosso was indicted by the Grand Jury in Anchorage last year for a five count felony indictment charging that he violated Alaska Statutes by fraudulently presenting a false claim to an insurance company in connection with a fire on board his fishing vessel, the DelCap.
DelGrosso was also charged with perjury in connection with false statements he made to obtain a $200,000 fishing loan from the Division of Investments, and with two counts of Theft in the Second Degree for filing for Permanent Fund Dividends while an Arizona resident. DelGrosso was also charged with violating the Alaska Statute relating to the crime of “Scheme to Defraud.”
DelGrosso entered a plea of “nolo contendre” before Superior Court Judge Mark Rowland and was found guilty of one consolidated count of Theft in the Second Degree, a Class C Felony, for falsely representing that he was a qualified resident of the State of Alaska for the purpose of receiving Permanent Fund Distribution.
On March 10, 1995, DelGrosso was sentenced by Judge Rowland to serve six months in jail, five years probation and 150 hours of community service. He must make restitution of the PFD funds received and is ineligible to receive future PFD distributions.
According to the Rules of Court, since DelGrosso had requested separate trials on the counts, a plea bargain was struck. This was done in both the interest of justice and in consideration of the costs of prosecuting two trials—one in Naknek and one in Anchorage.
The investigation was predicated upon receipt of a written complaint from Robert DelGrosso, of Mesa, AZ, that his son, Russell G. DelGrosso, the owner of the fishing vessel Delcap, intentionally burned his boat to the water-line, subsequent to a grounding while fishing in Bristol Bay, Alaska, during the summer of 1991.
The younger DelGrosso then filed an insurance claim, attributing the loss to an accidental fire, and collected. The elder DelGrosso stated that he didn’t educate his son to be a math teacher so that he could violate the law.
The complainant alleges Rusty claimed that, during the early morning hours of July 12, 1991, the crew awakened to find the boat aground and held by their nets. The junior DelGrosso had stated to the complainant that he was sorry he had purchased a “Bow-Picker” because it was harder to work and he would have difficulty selling it before the next fishing season. After putting out a distress call to the Coast Guard and telling his two crew members to leave the boat, the younger DelGrosso placed something on the gas stove and lit it.
DelGrosso and the crew then watched the boat burn from shore, photographing it at various stages. According to the complainant, DelGrosso claimed that by burning the boat, he would not have to pay off the debt on the boat and could use the entire settlement to purchase a new boat. The two crew members would be willing to testify to the arson, according to the complainant. The complainant also provided photographs of the burning boat.
As a result of this complaint, an investigation was initiated by the Alaska Division of Insurance to determine if a violation of Alaska Statutes (as relating to insurance laws) could be supported. Investigation disclosed that Russell DelGrosso filed a “Report of Marine Accident,” CG-2692, with the US Coast Guard claiming a loss date of July 12, 1991, at the Loran location 32548/45112, near Egegik, Alaska, in Bristol Bay.
Crew member William Howard Whitmore, Jr., stated that the incident actually occurred on July 16, 1991, and that he observed Rusty place what was described as a quilt over the burning cabin stove prior to abandoning ship. According to Whitmore, they had set their nets and he and crew member Brian Berry had gone to rest, leaving the boat owner, Russell DelGrosso, on watch. The next thing Whitmore was aware of was the boat being grounded in the surf of a beach. He recalled that Rusty had fallen asleep and the Delcap had drifted out of the fishing area and “grounded.” They then cut the nets free and, after calling a “mayday,” were told to abandon ship.
According to the ship’s log of the Alaska Department of Public Safety patrol vessel “Trooper,” the mayday was received at 4:33 AM on July 16, 1991. This date differed from the Coast Guard report.
The Delcap was insured through the GRE Insurance Group and a $50,000 claim was paid to DelGrosso.
According to the complainant and witness Whitmore, DelGrosso had been a resident of Arizona for at least 15 years. He maintained an Anchorage accommodation address to claim Alaska residency. DelGrosso used a friend’s residence in Anchorage, Alaska, for the purpose of receiving the Alaska Permanent Fund and Alaska commercial fishing loans. In addition, according to the source, DelGrosso claimed Arizona residency for the receipt of an FHA loan on property in the Phoenix area. This allowed him to receive a $200,000 loan through the Alaska Division of Investments for a commercial fishing loan based upon his being an Alaska resident. The application was received by the Division of Investments at a time that DelGrosso claimed to be visiting his parents in Arizona.
This investigation placed DelGrosso in a bit of a bind. If he is an Arizona resident, as claimed for the FHA loan, then he is in violation of Alaska law through the fraudulent insurance claim on the fishing vessel Delcap and through his receipt of Alaska Permanent Fund distribution. He would also be in violation of Alaska law for receiving the $200,000 Alaska Commercial fishing loan, and possibly of Federal law by making the application travel through the mail or across state lines.
Alternatively, if DelGrosso’s Alaska residency were to be upheld, he may still be in violation of Federal law through the receipt of an FHA loan as a claimed Arizona resident. DelGrosso would also be in violation of Federal law through the receipt of $50,000 through the mail, based upon the apparent arson of the fishing vessel—all of this notwithstanding the violation of Federal Marine law through the arson! Talk about being between a rock and a hard place…
As it turned out, the local District Attorney was unwilling to attempt to charge Rusty with arson/insurance fraud—primarily due to the inability to examine the burned-out vessel—so a plea agreement was struck.
John Jansen is an investigator for the Alaska Department of Insurance.
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