Theft lands former insurance salesman 50 days in jail

EVERETT — A former insurance salesman is expected to report to jail Nov. 1 after an investigation revealed that he siphoned away his customers’ premiums.

More than $50,000 was missing. Nearly 80 people were affected and many were unaware their policies weren’t current. The man sold the policies for American Family Mutual Insurance Company.

Levi Watson pleaded guilty to first-degree theft and admitted the crime was particularly egregious because there were multiple victims and the defendant misused his position of trust and fiduciary responsibility.

Snohomish County Superior Court Judge David Kurtz sentenced Watson on Tuesday to 50 days in jail. Watson, who didn’t have any criminal history, faced up to three months.

The judge agreed that Watson can serve 40 days of his sentence in work release if he qualifies and can find a facility outside of Snohomish County that will accept him.

The county shut down its work release program earlier this year due to a budget shortfall. Work release was offered to some criminal defendants who had jobs but faced a jail sentence. Defendants were housed in the secure facility near the jail when they weren’t working.

Watson, 45, also was ordered to pay back nearly $40,000.

He wrote the judge a letter, maintaining that the missing payments were a bookkeeping error, not theft. He listed his many volunteer efforts. He also explained the financial and personal pressures he was facing at the time.

“Regardless of what the evidence shows I have never in my life intentionally taken money or tried to hurt anyone,” Watson wrote.

“The reasons this ended up this way was my lack in care and custody of my financial duties in my business. My staff contributed to the issues but that’s due in large part to my poor training and direction,” he added.

Washington State Patrol detective Joshua Merritt investigated the case. He’s assigned to the criminal investigations unit with the state insurance commissioner. He interviewed Watson in June 2016.

An insurance investigator repeatedly tried to contact Watson in 2015. He failed to return calls or email messages. American Family Insurance also repeatedly tried to reach the defendant about the missing payments.

“He admitted he did not open his mail and avoided phone calls about the missing money because he could not handle it,” Merritt wrote in his report. “He said he intentionally did not contact the insurance company or anyone to identify how much was owed or try to establish any kind of payment plan.”

Watson was an insurance producer who sold policies to homeowners and business owners. He resigned in December 2014 from American Family Insurance and closed his business. His insurance license was revoked in the summer of 2015.

The missing payments came to the attention of authorities in early 2015 when American Family Insurance started transferring Watson’s clients to other producers. At that time, it was discovered that nine of his clients had made payments that hadn’t been forwarded to American Family.

An investigation was launched and records showed Watson had received the payments from the customers but the insurance company had no record of the premiums being forwarded, according to court records.

Some of the customers had written personal checks, and other payments were made as part of mortgages through lending companies.

American Family turned up more victims as the investigation continued, Merritt wrote.

Detectives obtained search warrants for Watson’s personal and business bank accounts. The records showed 554 checks deposited in his accounts between April 2013 and December 2014. Of those, 483 were verified as being valid payments forwarded to American Family accounts.

Watson told investigators he made mistakes on how the accounts were paid and how the money was moved around.

“Watson stated he knew he was behind in the accounts and had not created all of the policies that had been paid for,” Merritt wrote.

The detective showed Watson emails where the defendant provided proof of policies for coverage that didn’t exist, according to court papers. “Watson admitted in those cases he was hiding the fact that the money was gone.”

Diana Hefley: 425-339-3463; hefley@heraldnet.com.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Trader Joe’s customers walk in and out of the store on Monday, Nov. 20, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
New Trader Joe’s opens this week at Everett Mall

It’s a short move from a longtime location, essentially across the street, where parking was often an adventure.

Ian Bramel-Allen enters a guilty plea to second-degree murder during a plea and sentencing hearing on Wednesday, March 6, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
‘Deep remorse’: Man gets 17 years for friend’s fatal stabbing in Edmonds

Ian Bramel-Allen, 44, pleaded guilty Wednesday to second-degree murder for killing Bret Northcutt last year at a WinCo.

Firefighters respond to a small RV and a motorhome fire on Tuesday afternoon in Marysville. (Provided by Snohomish County Fire Distrct 22)
1 injured after RV fire, explosion near Marysville

The cause of the fire in the 11600 block of 81st Avenue NE had not been determined, fire officials said.

Ashton Dedmon appears in court during his sentencing hearing on Tuesday, March 5, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
Everett Navy sailor sentenced to 90 days for fatal hit and run

Ashton Dedmon crashed into Joshua Kollman and drove away. Dedmon, a petty officer on the USS Kidd, reported he had a panic attack.

A kindergarten student works on a computer at Emerson Elementary School on Wednesday, Feb. 28, 2024, in Everett, Washington. (Ryan Berry / The Herald)
‘¡Una erupción!’: Dual language programs expanding to 10 local schools

A new bill aims to support 10 new programs each year statewide. In Snohomish County, most follow a 90-10 model of Spanish and English.

Logo for news use featuring the Tulalip Indian Reservation in Snohomish County, Washington. 220118
Woman drives off cliff, dies on Tulalip Reservation

The woman fell 70 to 80 feet after driving off Priest Point Drive NW on Sunday afternoon.

Everett
Boy, 4, survives fall from Everett fourth-story apartment window

The child was being treated at Seattle Children’s. The city has a limited supply of window stops for low-income residents.

People head out to the water at low tide during an unseasonably warm day on Saturday, March 16, 2024, at Lighthouse Park in Mukilteo, Washington. (Ryan Berry / The Herald)
Everett shatters record high temperature by 11 degrees

On Saturday, it hit 73 degrees, breaking the previous record of 62 set in 2007.

Snohomish County Fire District #4 and Snohomish Regional Fire & Rescue respond to a motor vehicle collision for a car and pole. The driver was pronounced dead at the scene, near Triangle Bait & Tackle in Snohomish. (Snohomish County Sheriff’s Office)
Police: Troopers tried to stop driver before deadly crash in Snohomish

The man, 31, was driving at “a high rate of speed” when he crashed into a traffic light pole and died, investigators said.

Alan Dean, who is accused of the 1993 strangulation murder of 15-year-old Bothell girl Melissa Lee, appears in court during opening statements of his trial on Monday, March 18, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
31 years later, trial opens in Bothell teen’s brutal killing

In April 1993, Melissa Lee’s body was found below Edgewater Creek Bridge. It would take 27 years to arrest Alan Dean in her death.

Logo for news use featuring the municipality of Snohomish in Snohomish County, Washington. 220118
Man dies after crashing into pole in Snohomish

Just before 1 a.m., the driver crashed into a traffic light pole at the intersection of 2nd Street and Maple Avenue.

Bodies of two men recovered after falling into Eagle Falls near Index

Two men fell into the falls and did not resurface Saturday, authorities said. After a recovery effort, two bodies were found.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.